Phoenix-based ON Semiconductor Corp. said Monday it completed a $522 million acquisition of Sanyo's semiconductor business.
The deal is expected to increase ON's presence in Japan, and it will also give Sanyo a larger footprint for cross-selling its products.
ON said it paid $144 million in cash for the semiconductor business and will borrow $378 million from Sanyo Electric, a division of Panasonic Corp., to finance the deal.
Based in Gunma, Japan, Sanyo Semiconductor Co. has annual sales of about $1.2 billion and employs 8,300 people at manufacturing and packaging facilities in Japan and throughout Asia.
The deal was announced in July.
ON CEO Keith Jackson said the combination with Sanyo represents an important step in transforming the company into a global supplier of high-performance semiconductors for energy efficient electronics used in the consumer, automotive and industrial markets.
"This acquisition enables us to expand wholeheartedly into the Japanese market and to capture growth on a global basis," Jackson said in a statement.
Kevin Cassidy, a stock analyst who follows ON for Stifel Nicolaus & Company Inc., said the deal was sweetened last month. ON won't have to pay costs associated with running some fabrication plants in Japan, he said.
No layoffs are expected because of the combination.
Cassidy says the deal gives ON "a good foot in the door" in the Japanese market, which has been closed to U.S-based semiconductor companies.
"Because this management team from ON is very good at acquisitions and blending them into the ON culture, I think they're a company that could do it better than most others," he said. "They'll also be able to take the Sanyo product and sell it in other parts of the world where Sanyo is probably limited in their access."
ON, which has about 975 workers in metro Phoenix, plans to operate Sanyo Semiconductor as an independent division and will use the Sanyo logo for up to three years. However, plans are already underway to begin offering both companies' products and technologies, the companies said.
The deal to purchase Sanyo Semiconductor was originally announced for $366 million. On said it expects the acquisition will result in $30 million in income per quarter.
ON's stock was up less than 1 percent to $9.92 in midday trading Monday.
by John Yantis The Arizona Republic Jan. 3, 2011 03:44 PM
On Semiconductor acquires Sanyo Semiconductor
