STMicroelectronics Acquires Alcatel Microelectronics

April 15, 2002 by Jeff Shepard

STMicroelectronics Inc. (ST, Geneva) announced that it is acquiring Alcatel Microelectronics from Alcatel SA (Paris, France), only to sell Alcatel’s mixed-signal business to AMI Semiconductor Inc. (AMIS, Pocatello, ID). ST is acquiring Alcatel Microelectronics for about $343.5 million (390 million euros) in cash. The two companies will cooperate on the joint development of DSL chipsets, with ST also becoming a preferred supplier of Alcatel.

"Integrating Alcatel Microelectronics into STMicroelectronics and extending our partnership with ST will create a strong win-win situation for both companies," said Etienne Fouques, president of Alcatel's carrier networking activities. "Alcatel, worldwide leader in the DSL market, will continue to expand its product offering and breadth of DSL services to its wide customer base. This transaction will ensure a high-quality sourcing of essential components for our growing DSL product portfolio."

Additionally, ST is selling Alcatel Microelectronics’ mixed-signal ASIC business and development groups to AMIS for an undisclosed sum. AMIS also gains two fabs in Oudenaarde, Belgium, and the associated process technologies. The deal will extend AMIS’ mixed-signal ASIC portfolio to include high-voltage, BiCMOS and other analog capabilities. The two companies have also signed a supply agreement for AMIS to provide STMicro with certain manufacturing services.

"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 CEO of AMIS. "Our agreement with STMicroelectronics will enhance our ability to serve our customers, and strengthens our European and global presence. This transaction will also add over $100.0 million in annual sales revenues as we continue the goal of growing our company."