National Semiconductor Corporation is going to be bought over by Texas Instruments Inc for $6.5 billion. And the main idea behind the deal is to increase share in the growing semiconductor business.
Both the companies are in the business of making chips that are used in consumer electronics which include cell phones and tablet computers. Then there are industrial equipments as well. But the difference is in the number of equipments that each of the companies make. While for Texas Instruments Inc. it is 30,000 for National it stands at 12,000.
And now that the merger is happening, the analysts believe that there is going to be good synergy between the two. Since most of their products are similar, what they now need to do is to come up with something that provides product differentiation.
Said Chief Executive Officer of Texas Inst, Rich Templeton that it is such differentiation that makes acquisitions more attractive. And there is minimal product overlap with National. Less of different products mean that more customers can be engaged with without making any much of a difference.