Ixys has said it will preserve the Zilog brand after the acquisition, which is subject to the approval of Zilog shareholders and other customary closing conditions and is expected to conclude in the first quarter of 2010.

Ixys has been interested in Zilog for some time. It attempted to buy Zilog in May 2008 when it offered $4.50 per share. Zilog has endured a difficult year and at one point laid of more than one third of its workforce.

Over its long history Zilog has focused on the microcontroller business while Ixys has a range of products geared toward industrial, telecommunications, medical, automotive, alternative energy and consumer applications. The combination of the two companies will allow Ixys to leverage analog power management with digital control, the company said.

"As the world migrates toward SoCs, Zilog's core microcontroller technology along with Ixys' core power solutions create entirely new products that will meet the needs for today and tomorrow," said Federico Faggin, chairman and co-founder of Zilog, in a statement issued by Ixys.

"Zilog's 35-year history in microcontrollers with its legendary Z80 and Z8 architectures parallels Ixys' pioneering technologies in power MOSFETs, IGBTs and HVICs," said Nathan Zommer, CEO and founder of Ixys. "With the expected rebound in MCU sales in 2010, we anticipate a growth in opportunities for refined power control in many applications; the acquisition and integration of this MCU business will strengthen our position and allow us to take advantage of these opportunities. We believe this transaction will create further value for our shareholders, employees and customers through a further expansion and diversification of our product offerings. As it is one of the pioneers of MCUs in Silicon Valley, we plan to keep the Zilog entity with its recognized and valued trademark."

"Zilog has actively explored a broad range of strategic alternatives to enhance shareholder value. The price that Ixys is proposing to pay is a premium to our current stock price, as well as a substantial premium to the average of the prices at which we've traded throughout 2009," said Darin Billerbeck, Zilog's president and chief executive officer. "This acquisition brings liquidity to our shareholders, while increasing our financial stability in these continuing uncertain economic times."

In addition to expanding market opportunities, the acquisition will allow IXYS and Zilog to pool R&D resources, leverage economies of scale, reduce manufacturing costs and streamline and integrate operational and support costs. Over time, the integration is expected to result in improved financial results for the combined organization, Ixys said.

Related links and articles:

www.ixys.com

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