Apr 16, 2002 Paris
In a complex series of transactions, STMicroelectronics said Monday (April 15) that it has agreed to acquire Alcatel Microelectronics from telecom giant Alcatel SA for about $343 million in cash. But in an usual twist, STMicroelectronics turned around and announced it had also agreed to sell the mixed-signal business of Alcatel Microelectronics to AMI Semiconductor Inc. of Pocatello, Idaho.
ST's transaction with AMI Semiconductor will cover Alcatel Microelectronics' mixed-signal ASIC business and development groups, including two fabrication facilities located in Oudenaarde, Belgium, and the associated process technologies. The terms of this agreement were not disclosed.
The series of agreements will mean "each of the companies involved in this transaction will have been able to reinforce their respective core businesses and will be able to focus even more on their strategically important markets," said Alain Dutheil, corporate vice president of strategic planning and human resources at ST, based near Geneva.
Under its agreement with Alcatel, ST will enter into a joint development project with the Paris-based telecommunications giant to create chip sets for digital subscriber line (DSL) connections for the open market. The agreement also calls for ST to become a preferred supplier of Alcatel, expanding their long-standing strategic alliance.
As part of the AMI Semiconductor agreement, ST will have access to a portion of the Alcatel Microelectronics manufacturing facilities and process technology. The transaction will add mixed-signal capabilities to AMI Semiconductor's portfolio, including high-voltage BiCMOS.
"The addition of this mixed-signal technology will enable us to achieve our goal to provide a total ASIC solution to the automotive, industrial, medical, and telecom markets," said Christine King, president and chief executive officer of AMI Semiconductor. She said the transaction will strengthen AMI's presence in Europe as well as add over $100 million in annual revenues to the company.
Alcatel Microelectronics is headquartered in Belgium. It is focused on mixed-signal technologies for telecommunications, automotive, and computer peripheral systems. In 2001, Alcatel Microelectronics had revenues of about �350 million euros ($308 million).
Alcatel's chip operation last year stepped up its activities in the U.S. automotive markets after primarily serving European customers for the past 11 years (see Nov. 11 story).
Originally, Alcatel Microelectronics was formed in the 1980s as Mietec under a joint venture between Bell Telephone Manufacturing Co. of Belgium and a Flanders regional investment company. Paris-based Alcatel became a part owner of Mietec in 1987 and then purchase all shares in 1990.
Alcatel in Paris has been shopping for a buyer of its semiconductor business for a number of months in order to focus more of its own resources on core communications systems products.
The acquisition is expected to close within two months and is subject to regulatory approvals, said ST.
