Texas Instruments buys National Semiconductor for $6.5B

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Monday was a good day to be a National Semiconductor (NYSE: NSM) shareholder.

(Also see: Global semiconductor sales climb 14.4% in November)

National Semi's shares rocketed more than 70 percent above Monday's closing price in extended trading after Texas Instruments (NYSE: TXN) announced it would purchase the analog-chip rival for $6.5 billion, or $25 a share.

After closing Monday's regular session at 14.07, National Semi shares reached as high as 24.53 after hours, a gain of 74.3 percent. Texas Instrument shares, meanwhile, were down 42 cents, or 1.2 percent, to 33.69 from Monday's closing price of 34.11.

"This acquisition is about strength and growth," Texas Instruments CEO Rich Templeton said in a statement. "National has an excellent development team, and its products combined with our own can offer customers an analog portfolio of unmatched depth and breadth."

"Our two companies complement each other very well," said Don Macleod, National's chief executive officer. "TI has much greater scale in the marketplace, with its larger portfolio of products and its large global sales force. This provides a platform to enhance National's strong and highly profitable analog capability, power management in particular, leading to meaningful growth."

The announcement cited each company's "unique strengths," including TI's 30,000 analog products and National's 12,000 analog products. With the purchase, TI says analog semiconductors will comprise nearly half of its revenue.

TI reported analog revenue of $6.0 billion last year, making it the analog semiconductor market leader with 14 percent. National's 2010 revenue of $1.6 billion was good for 3 percent market share.

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