ON Semi To Acquire AMIS Holdings In All-Stock Transaction Valued At Approximately $915 Million

December 16, 2007 by Jeff Shepard

ON Semiconductor Corp. and AMIS Holdings, Inc., parent company of AMI Semiconductor, announced the signing of a definitive merger agreement providing for the acquisition of AMIS by ON Semiconductor in an all-stock transaction with an equity value of approximately $915 million.

"The acquisition of AMIS furthers the transformation of ON Semiconductor into an analog and power solutions leader with enhanced scale, higher value and higher margin products, deep customer relationships and an expanded addressable market," said Keith Jackson, ON Semiconductor President and CEO. "Combining ON Semiconductor’s leading standard products and advanced manufacturing infrastructure with AMIS’s growing standard products business and substantial custom product portfolio will enable the combined company to more comprehensively address our customers’ needs. AMIS will immediately contribute exciting new products and capabilities in the medical and military/aerospace markets and will complement our existing automotive and industrial businesses. Over time, we plan to leverage the advanced sub-micron capabilities of our Gresham, Oregon, fabrication facility to achieve operational synergies and extend AMIS’s high voltage and low power offerings."

"This transaction represents a compelling opportunity for AMIS employees, customers and shareholders by combining the outstanding manufacturing excellence of ON Semiconductor with the world class mixed-signal design talent of AMIS," stated Christine King, CEO of AMIS. "We believe AMIS shareholders will not only benefit from the initial premium represented by the purchase price, but also from a significant post-merger ownership in a combined ON Semiconductor/AMIS company that is expected to have enhanced growth, cash flow and profitability prospects. Through the combination, our employees will have access to a more complete technology roadmap and capabilities as well as the opportunity to serve our customers with a wider array of products; either custom or standard."

Under the terms of the agreement, which has been approved by both boards of directors, AMIS shareholders will receive 1.150 shares of ON Semiconductor common stock for each share of AMIS common stock they own. Based on the closing stock price of ON Semiconductor on December 12, 2007, this represents a value to AMIS shareholders of approximately $10.14 per share. Upon completion of the transaction, ON Semiconductor will issue approximately 104 million shares of common stock on a fully diluted basis to complete the transaction. ON Semiconductor and AMIS stockholders will own approximately 74% and 26%, respectively, of the combined company.

The transaction is subject to the approval of shareholders from both companies as well as customary closing conditions and regulatory approvals. Stockholders holding approximately 24% of the voting stock of AMIS have entered into voting agreements in support of the transaction.

The companies expect the transaction to close in the first half of 2008. Upon closing, ON Semiconductor may record a one-time charge for purchased in-process research and development expenses and other deal related costs. The amount of that charge, if any, has not yet been determined.