Boston, MA 06/20/2014 (wallstreetpr) – The merger agreement between semiconductor giants, TriQuint Semiconductor (NASDAQ:TQNT) and RF Micro Devices, Inc. (NASDAQ:RFMD) has passed the first litmus test after completion of the Applicable waiting period. The waiting period is normally 30 days and commences once companies file a pre-merger notification report. The waiting period can be increased, and regulators also have the right to impose an injunction on the transaction if they find it has the potential to result in un-competitiveness issues.
Merger Awaiting Shareholders Approval
The merger agreement now awaits the approval of shareholders across the two companies along with fulfillment of other mandatory closing conditions. The merger is valued at $1.6 billion and expected to close in the second half of the year. The merged company is expected to create a behemoth in the semiconductor manufacturing industry with the capacity of offering essential components for mobile companies’ as Apple Inc. (NASDAQ:AAPL).
The combined company is expected to have annual revenue of $2 billion with the ability of joining radio frequency components under a common platform essential for mobile devices fabrication. The company is also expected to create an undisputed market leader with a product portfolio that includes power amplifiers, power management integrated circuits and switch based products.
Impact of the Merger
The merger should give the two companies better bargaining power making it difficult for giant customers led by Apple Inc. (NASDAQ:AAPL) and Samsung to push back on pricing. The merger is also set to provide a huge revenue generating potential as global smartphone users continue to increase, expected to triple to 5.6 billion by 2019.
Ability to serve the infrastructure and aerospace industries is also set to receive a major uplift with the merger. In addition, the merger will also offer synergistic benefits with the ability of increasing profitability through economies of scale and the sharing of manufacturing expertise across the divide
The transactions should generate approximately $75 million in annual cost savings in the first year after the finalization and a further $75 million in the second year.
