Summary
Microchip Technology Incorporated (MCHP) announced a significant strategic move on May 7, 2015, entering into a definitive Agreement and Plan of Merger to acquire Micrel, Incorporated. This transaction, structured as a two-step merger, will see Micrel become a wholly owned subsidiary of Microchip. The acquisition is set to be completed through a combination of cash and Microchip's common stock, with Micrel shareholders having the option to elect to receive either $14.00 in cash or an equivalent value in Microchip stock for each share of Micrel common stock they hold. A minimum of 42% of Micrel's shares will be converted into stock consideration, with the exact stock exchange ratio determined by Microchip's average closing stock price over a ten-day period prior to closing. This acquisition is not subject to any financing condition and is expected to be a key step in Microchip's growth strategy. The transaction has received unanimous approval from the Boards of Directors of both companies. The closing is contingent upon several customary conditions, including regulatory approvals (such as HSR), shareholder approval from Micrel, and the effectiveness of a Form S-4 registration statement for the Microchip shares. Additionally, Micrel's directors and executive officers have entered into voting agreements, committing to vote their shares in favor of the merger, underscoring their support for the transaction.
Key Highlights
- 1Microchip Technology Inc. to acquire Micrel, Incorporated via a merger transaction.
- 2Acquisition consideration offers Micrel shareholders a choice between $14.00 cash or Microchip common stock per share.
- 3A minimum of 42% of Micrel's shares will be converted into Microchip stock, subject to election and proration.
- 4The transaction is structured as a two-step merger, with Micrel surviving the first step and merging into a Microchip subsidiary in the second.
- 5Boards of Directors for both Microchip and Micrel have unanimously approved the merger agreement.
- 6The deal is subject to customary closing conditions, including regulatory approvals (e.g., HSR) and Micrel shareholder approval.
- 7The acquisition is not contingent on Microchip securing financing.