Photo: Texas Instruments
Deutsche Bank analysts believe Texas Instruments may have paid too much to acquire National Semiconductor.The deal valued National Semiconductor at $6.5 billion, a 78% premium, and has launched shares of the company 71% this morning. Texas Instruments shares are down more than 1% on the news of the deal.
Deutsche Bank’s Ross Seymore does not see this deal stimulating growth for National Semiconductor and doesn’t see any cost savings for Texas Instruments either.
From Deutsche Bank’s Ross Seymore:
We view this deal as making strategic LT sense for TXN given its recent capacity additions and its stated goal of increasing market share within the analogue centre. However, we also note that NSM’s growth has lagged in the past and growth via such large acquisition will take years to materialise. While NSM’s shareholders clearly benefit with the 78% premium, we wonder if TXN paid more than necessary. While this move will benefit analogue-sector valuations in the near-term, we do not expect accelerating consolidation to result.