Headline: Royal Philips Electronics to Acquire VLSI Technology for $21.00 Per
Share in Cash
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SUNNYVALE, Calif.--(BUSINESS WIRE)--May 3, 1999--Royal Philips
Electronics (NYSE:PHG) and VLSI Technology, Inc. (NASDAQ:VLSI) today
announced they have signed a definitive merger agreement under which
Philips will acquire all VLSI shares for $21.00 per share in cash.
VLSI will become a key part of Philips Semiconductors, a $4.5
billion division of Royal Philips Electronics that is one of the
world's leading global suppliers of communications and consumer
semiconductor products.
VLSI currently has approximately 46.6 million shares outstanding,
of which Philips already owns 1.2 million shares. Philips will also
cash out options on an additional 11.3 million VLSI shares.
Philips will tomorrow amend its existing tender offer to purchase
all of the outstanding shares of VLSI common stock to increase the
purchase price to $21.00 per VLSI share and to extend the expiration
date of the offer to midnight, New York City time, on Friday, May 14,
1999, unless further extended. The tender offer was previously
scheduled to expire on May 10, 1999. To date, approximately 237,316
VLSI shares have been validly tendered and not withdrawn pursuant to
Philips' tender offer. Philips expects to mail amended tender offer
materials to VLSI stockholders in the next several days.
VLSI's Board of Directors has voted unanimously to approve the
definitive merger agreement, and to recommend that VLSI stockholders
accept Philips' amended cash tender offer.
Arthur van der Poel, Chairman of Philips Semiconductors, said:
"We are pleased to have been able to work out a negotiated transaction
with VLSI at a price that is fair to the shareholders of both
companies. After reviewing non-public VLSI information and meeting
with VLSI management, we have concluded there is additional value in
the company. VLSI has exactly the technology, know-how and people in
place to help further the strategy of Philips Semiconductors. Now that
we have concluded the agreement in this way, we can focus on getting
to know the VLSI employees who we recognize as one of the company's
key assets, and move forward together."
VLSI and Philips Semiconductors have complementary operations
with almost no product overlap. Combining VLSI's digital expertise and
capabilities in wireless communications, computer networking and ASICs
with Philips' strengths in wireless, multimedia, automotive and
consumer electronics will benefit the customers of both companies and
create numerous growth opportunities.
Alfred J. Stein, Chairman and Chief Executive Officer of VLSI,
said: "We are very pleased that the strategic review process in which
we have been engaged has resulted in an agreement that is good for our
customers, good for our business partners, good for our employees,
and, above all, good for our stockholders. VLSI is one of the leading
designers and manufacturers of leading-edge semiconductor products.
Philips is one of the world's leading consumer electronics companies.
Together, we can accomplish far more for the benefit of our
constituents than either company could do as standalone entities. I
look forward to working closely with Philips to complete the
transaction and to achieve a smooth and seamless transition."
Credit Suisse First Boston Corporation served as financial
advisor to Philips and Morgan Stanley & Co. Incorporated and Hambrecht
& Quist LLC served as financial advisors to VLSI with respect to the
Philips tender offer and the evaluation of strategic alternatives to
such offer.
VLSI stockholders with questions about Philips' tender offer can
call Philips' Information Agent for the offer, Innisfree M&A
Incorporated, at (888) 750-5834 or (212) 750-5833 (collect), or VLSI's
Information Agent, MacKenzie Partners at (800) 322-2885 or (212)
929-5500 (collect).
Royal Philips Electronics of the Netherlands is one of the
world's biggest electronics companies and Europe's largest, with sales
of US$33.9 billion in 1998. It is a global leader in color television
sets, lighting, electric shavers, color picture tubes for televisions
and monitors, and one-chip TV products. Its 233,700 employees in more
than 60 countries are active in the areas of lighting, consumer
electronics, domestic appliances, components, semiconductors, medical
systems, business electronics, and IT services (Origin). Philips is
quoted on the NYSE, London, Frankfurt, Amsterdam and other stock
exchanges. News from Philips is located at www.news.philips.com.
VLSI Technology, Inc. designs and manufactures custom and
semi-custom integrated circuits for leading firms in the wireless
communications, networking, consumer digital entertainment and
advanced computing markets. The company is based in San Jose, Calif.
with 1998 revenues from continuing operations of $547.8 million, and
approximately 2,200 employees worldwide. Information related to VLSI
Technology is available at VLSI's homepage, vlsi.com.
CONTACTS: Royal Philips Electronics
Jeremy Cohen, 31-20-597-7213
or
Investors:
VLSI Technology
Lisa Ewbank, IR Director (Investors)
408/474-5519
or
Sard Verbinnen & Co.
George Sard/David Reno, 212/687-8080
or
Media:
Kekst and Company
Todd Fogarty
212/521-4854
or
Philips Semiconductors
Jodi Guilbault, 408/991-2332
Jodi.Guilbault@sv.sc.philips.com
www.semiconductors.philips.com
KEYWORD: CALIFORNIA
INDUSTRY KEYWORD: ENTERTAINMENT COMPUTERS/ELECTRONICS COMED
MERGERS/ACQ
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