US chipmaker Onsemi has proposed an acquisition of Allegro MicroSystems for $35.10 per share in cash.
According to Onsemi, the company has made “numerous attempts over the past six months to enter into constructive discussions regarding a potential transaction,” with its most recent proposal representing an increase to the initial $34.50 per share proposal submitted in September 2024.
The Arizona-based chipmaker said the acquisition would be a “natural strategic fit,” adding that it would benefit customers and employees of both companies, in addition to delivering “immediate and certain value” to Allegro shareholders.
However, several hours after Onsemi announced its intentions, Allegro responded by saying it had received “an unsolicited proposal from Onsemi” and that the company’s board of directors had reviewed it and determined the proposal “was inadequate.”
Founded in 1990 and headquartered in Manchester, New Hampshire, Allegro designs, develops, and manufactures sensor integrated circuits and application-specific analog power offerings. The company jointly owns Polar Semiconductor with Japan-based Sanken Electric.
“We believe the combination of Onsemi and Allegro would bring two highly complementary businesses together, benefitting our respective customers and delivering immediate value to Allegro shareholders,” said Hassane El-Khoury, president and CEO of Onsemi. “The Allegro team has built an impressive leadership position in magnetic sensing and power ICs for the automotive and industrial end-markets. Together, Allegro’s unique product portfolio and Onsemi’s differentiated intelligent power and sensing technologies would create a diversified leader in automotive, industrial, and AI data center applications.”
He added: “We urge the Allegro Board and management team to engage in good faith discussions with Onsemi’s management team regarding the proposed transaction.”
Allegro said it does not intend to comment further unless it determines it is necessary to do so.
In January of this year, Onsemi acquired the Silicon Carbide Junction Field-Effect Transistor (SiC JFET) technology business, including the United Silicon Carbide subsidiary, from Qorvo for $115m in cash.
The chipmaker said the acquisition would complement its extensive EliteSiC power portfolio, allowing the company to address the need for high energy efficiency and power density in the AC-DC stage in power supply units for AI data centers.
