NEW YORK (TheStreet) -- Atmel (ATML stock is advancing by 15.27% to $8.38 in pre-market trading on Monday, after the company agreed to be acquired by London-based Dialog Semiconductor (DLGNF for $4.6 billion in a cash and stock deal.
Shareholders of San Jose, Calif.-based Atmel will receive $4.65 in cash and 0.112 of a Dialog American Depository Share for each Atmel share.
Atmel shareholders will own about 38% of the combined company when the transaction is completed.
Dialog Semiconductor expects to have $150 million in annual costs synergies within two years and about $2.7 billion of combined revenues.
"Adding Dialog's world-class capabilities in power management with Atmel's keen focus on microcontrollers, connectivity and security will enable Dialog to more effectively target high-growth applications within the mobile, IoT and automotive markets," Atmel CEO Steven Laub said in a statement.
The deal, which was approved by the companies' boards, is subject to regulatory and shareholder approval, and is expected to close in the first quarter of 2016.
Insight from TheStreet's Rating Team
TheStreet's Jim Cramer, Portfolio Manager of Action Alerts PLUS Charitable Trust portfolio, commented on Dialog Semiconductor's acquisition of Atmel on Real Money. Here's what he had to say about the deal:
If I had told you last Monday to buy Atmel, the semiconductor company, only to watch it drop 12% in the following five days, you would have had my head. Or at least the congenial boys and girls on Twitter would. I can only imagine the cat-calling, with the critics saying "what do you know about Atmel," and "do some homework."
It wouldn't matter than I spent a day at Atmel when I was a hedge fund manager and have stayed close to it ever since, or that I actively championed it as one of the stocks on TheStreet's Activist target list. The fact is, the stock dropped 12% because of the overall market -- not because of Atmel -- and that has created an instant angry shareholder base.
But yesterday Dialog Semiconductor, a German outfit, bid $10.42 in cash and stock, a 43% premium over the closing price of $7.27, so if I had pitched it in the tsunami of selling from the latter half of the week, I would been a hero, not a goat.
More important, Atmel was an orphan. A niche semiconductor company that has less than 10% cellphone -- Dialog has a huge cellphone exposure, particularly with Action Alerts PLUS portfolio holding Apple (AAPL - Get Report) -- dialog needed to expand into the industrial segment, the internet of all things, so to speak, and that's Atmel's specialty.
-Jim Cramer's "The Atmel Deal Show How Opportunity Keeps Coming In" originally published on 09/21/15 on Real Money.
Want more like this from Jim Cramer and Wall Street's sharpest minds BEFORE your stock moves? Learn more about Real Money now!