NEW YORK (
) -- Tech giants
(TXN - Get Report)
(NSM - Get Report)
have entered a $6.5 billion merger agreement that proposes to combine two of the largest chip companies in the U.S.
Texas Instruments says it will pay $25 a share in an all-cash deal for the Santa Clara, Calif.-based National Semi. Both companies expect the deal to close by year's end.
"This acquisition is about strength and growth," TI chief Rich Templeton said in a press release Monday after the bell.
The move comes during a massive shift in the chip sector, which sees energies shifting from PCs to mobile devices. TI has been one of the players in the mobile processor market, but the sharp rise and early success of competitors like
have not exactly helped TI in the most recent generation of phones.
With the addition of National Semi, TI adds a broader collection of products like power management components and amplifiers that promise to open the Dallas chip giant to new markets.
The purchase price of $25 a share comes at more than a 75% premium to National Semi's recent $14 stock price. National Semi shares were up 70% to $23.96 in after-hours trading.
The move helped push up shares of National Semi rivals like
(ADI - Get Report)
, which was up 7%, and
, which was up 6% in after-hours trading Monday.
Meanwhile, shares of
, which has been largely left behind the mobile game, were unchanged.
--Written by Scott Moritz in New York.
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