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MICROCHIP TECHNOLOGY INC 8-K Report, Material Agreement (Jan 19, 2016)

Filed January 19, 2016For Securities:MCHPMCHPP

Summary

This Form 8-K filing by Microchip Technology Incorporated (MCHP) on January 19, 2016, announces a significant strategic move: the entry into a definitive Agreement and Plan of Merger to acquire Atmel Corporation. This acquisition, structured as a merger between Microchip, Atmel, and a wholly-owned subsidiary of Microchip, represents a substantial expansion for Microchip in the semiconductor industry. The transaction details indicate a mixed-consideration deal, where Atmel shareholders will receive $7.00 in cash and Microchip common stock valued at $1.15 per Atmel share. This valuation is based on the average closing price of Microchip's stock over the ten trading days prior to closing, with a provision to adjust the cash component if the stock issuance exceeds 13 million shares, ensuring the total per-share consideration remains $8.15. Both companies' Boards of Directors have approved the merger, which is subject to customary closing conditions, including regulatory approvals and shareholder consent from Atmel.

Key Highlights

  • 1Microchip Technology Inc. has entered into a definitive agreement to acquire Atmel Corporation.
  • 2The acquisition is structured as a merger with a wholly-owned subsidiary of Microchip.
  • 3Atmel shareholders will receive a combination of cash ($7.00) and Microchip common stock (valued at $1.15 per share) per Atmel share.
  • 4The total per-share consideration is valued at $8.15, with a mechanism to adjust cash and stock mix if stock issuance limits are approached.
  • 5Both Microchip and Atmel Boards of Directors have approved the merger agreement.
  • 6The transaction is subject to customary closing conditions, including regulatory approvals (HSR, Germany, South Korea) and Atmel shareholder approval.
  • 7The deal is not contingent on Microchip securing financing.

Frequently Asked Questions

The total value of the acquisition is based on the $8.15 per share consideration for Atmel's common stock. The exact aggregate value would depend on the number of outstanding Atmel shares at the time of closing, as well as the market price of Microchip's common stock.

Key conditions include the expiration of waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act, receipt of antitrust approvals in Germany and South Korea, the effectiveness of a registration statement for Microchip's shares, and approval by Atmel's shareholders. Regulatory and shareholder approvals are critical steps.

Yes, Atmel shareholders will need to approve the merger agreement. Microchip will file a Form S-4 registration statement which will include a proxy statement for Atmel shareholders, detailing the transaction and the recommended vote.

No, the filing explicitly states that the transaction is not subject to any financing condition, indicating that Microchip has the necessary resources or financing already in place.