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ON Semiconductor Cancels $6.9 Billion Acquisition!
4/20/2025 11:37:46 PM
According to a statement released by ON Semiconductor, the company determined that "there is no viable path forward for the transaction at this time," and CEO Hassane El-Khoury said the company is "committed to taking a disciplined approach to capital allocation and maximizing long-term shareholder value ".
ON Semiconductor disclosed its offer in March, saying it valued the company at $6.9 billion including debt, and that the offer was higher than the $34.50 per share it offered last September. But a month later, the acquisition still choose to cancel. allegro mainly focuses on the design and manufacture of magnetic sensors and their related integrated circuits, especially Hall effect sensors are known. These integrated circuit products are widely used in automotive (such as motor control, current detection and position sensing), industrial control and consumer electronics, as well as data centers and factories.
The intent of the acquisition of Allegro by ON Semiconductor is expected to expand the original sensing product line in the business segment, and after the integration can also reduce R&D costs and improve overall profitability. But Allegro is obviously not much interest in the acquisition of ON Semiconductor.
Since last year, Allegro has not decided to sell the whole company, and in addition to ON Semiconductor, there are other consortia interested in Allegro. With the release of tariff policies in many countries around the world, the electric car market in Europe and the United States has slowed down, also leading to automotive chip makers may face sales pressure.
ON Semiconductor was deeply affected, recently disclosed a restructuring plan, and plans to lay off 2,400 employees in 2025. In addition, the Korean market is not save. ON has stopped investing in its Silicon Carbide (SiC) power management IC factory in South Korea and recalled most of the engineers at its Bucheon plant in Gyeonggi Province, South Korea, to the United States. According to sources, there are currently only a few researchers at the plant, and those are expected to be reorganized as well.
In 2022, ON announced that it had built the S5 production line at its Bucheon plant at a cost of 1.4 trillion won ($1 billion). Previously, the company's other production lines at the plant had been acquired from Samsung. The Bucheon plant's total SiC production will account for 35% to 40% of ON's total SiC output, ON CEO Hassane El-Khoury said at the time. But with the slowdown in electric vehicle sales by South Korean automakers and increased demand for Si IGBT chips used in economical electric vehicles, South Korea's investment plans will need to change.
ON Semiconductor disclosed its offer in March, saying it valued the company at $6.9 billion including debt, and that the offer was higher than the $34.50 per share it offered last September. But a month later, the acquisition still choose to cancel. allegro mainly focuses on the design and manufacture of magnetic sensors and their related integrated circuits, especially Hall effect sensors are known. These integrated circuit products are widely used in automotive (such as motor control, current detection and position sensing), industrial control and consumer electronics, as well as data centers and factories.
The intent of the acquisition of Allegro by ON Semiconductor is expected to expand the original sensing product line in the business segment, and after the integration can also reduce R&D costs and improve overall profitability. But Allegro is obviously not much interest in the acquisition of ON Semiconductor.
Since last year, Allegro has not decided to sell the whole company, and in addition to ON Semiconductor, there are other consortia interested in Allegro. With the release of tariff policies in many countries around the world, the electric car market in Europe and the United States has slowed down, also leading to automotive chip makers may face sales pressure.
ON Semiconductor was deeply affected, recently disclosed a restructuring plan, and plans to lay off 2,400 employees in 2025. In addition, the Korean market is not save. ON has stopped investing in its Silicon Carbide (SiC) power management IC factory in South Korea and recalled most of the engineers at its Bucheon plant in Gyeonggi Province, South Korea, to the United States. According to sources, there are currently only a few researchers at the plant, and those are expected to be reorganized as well.
In 2022, ON announced that it had built the S5 production line at its Bucheon plant at a cost of 1.4 trillion won ($1 billion). Previously, the company's other production lines at the plant had been acquired from Samsung. The Bucheon plant's total SiC production will account for 35% to 40% of ON's total SiC output, ON CEO Hassane El-Khoury said at the time. But with the slowdown in electric vehicle sales by South Korean automakers and increased demand for Si IGBT chips used in economical electric vehicles, South Korea's investment plans will need to change.
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2025-04-20
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