SAN FRANCISCO—Fairchild Semiconductor International Inc. said Tuesday (Jan. 5) its board of directors has determined that a revised unsolicited acquisition bid from China Resources Microelectronics Ltd. and Hua Capital Management Co. Ltd. is superior to the buyout offer it previously accepted from ON Semiconductor Corp.
Fairchild said it remains subject to the merger agreement with ON Semi. But the board’s determination paves the way for Fairchild to engage in discussions with the Chinese firms in order to further consider the proposal, the company said.
Last month, Fairchild acknowledged it received a proposal to acquire the firm for $21.70 per share cash, or about $2.46 billion total. Fairchild agreed in November to be acquired by ON Semi for $20 per share, or about $2.4 billion.
China Resources Microelectronics is a unit of state-owned China Resources Holdings Co. Hua Capital is an investment firm that is involved in the still-pending acquisition of OmniVision Technologies Inc. announced in April.
The proposal from China Resources and Hua “would reasonably be expected to result in a superior proposal as defined in the company's agreement and plan of merger with ON Semiconductor,” Fairchild said in a statement.
Bidding wars have become increasingly common in the semiconductor industry amid an unprecedented wave of consolidation in the sector. As the pool of acquisition targets shrinks, buyers have shown a willingness to pony up more to land them.
The total value of semiconductor industry acquisitions announced last year exceeded $105 billion, more than eight times the average annual value of acquisitions by semiconductor companies over the previous five years, according to market research firm IC Insights Inc.
—Dylan McGrath covers the semiconductor industry for EE Times.