Officials at National Semiconductor said Tuesday that their company’s acquisition by Dallas-based Texas Instruments will not affect their plant in South Portland, but analysts said the takeover could lead to job cuts in the company.
“There are some departments in both organizations that essentially do the same things. Could that affect the employee base in Maine? Absolutely,” said Ben Clark, senior vice president of Bayside Wealth Management, a Portland-based division of UBS Financial Services.
Craig Berger, an analyst with the Arlington, Va.-based investment bank FBR Capital Markets, said the acquisition will almost certainly lead to layoffs of staffers with redundant job functions, such as those in accounting, legal and upper management.
But National Semiconductor officials say jobs aren’t in danger, and that the acquisition will open access to larger markets and could be a boon for the Maine manufacturing plant.
“From Maine’s perspective, it’s good news,” said Lee Ann Schlatter, a spokeswoman based at National Semiconductor’s headquarters in Santa Clara, Calif. “(Texas Instruments) sees the National manufacturing organization as continuing to function as it does now. They have said they don’t expect any reduction in force at the manufacturing sites.”
News of the acquisition broke Monday with an announcement that Texas Instruments, with $14 billion in annual revenue, had signed an agreement to buy National Semiconductor for $25 per share — about $6.5 billion.
National’s stock price soared 72.5 percent on the news, closing at $24.27 per share. The stock closed down slightly Tuesday, at $24.06.
Shares of Texas Instruments, which fell 1.9 percent to $33.46 on Monday, rose Tuesday to $34.69.
National Semiconductor has about 5,700 employees and makes analog semiconductors, which are used in a variety of electronics to transform signals such as sound into digital formats.
The company, which reported $1.6 billion in revenue in 2010, operates manufacturing plants in South Portland and in Greenock, Scotland, and an assembly site in Malaysia.
There are about 500 workers at the South Portland plant, which makes dinner plate-sized silicon wafers that are cut into individual semiconductors.
In a prepared statement, Texas Instruments President and CEO Rich Templeton said the acquisition will allow his company to grow in the analog chip market. He praised the strength of National’s chip development process and the company’s cost structure.
Texas Instruments makes 30,000 analog semiconductor products, while National makes 12,000 varieties.
Templeton said the acquisition will allow National Semiconductor’s products to be sold by Texas Instruments’ much larger sales force.
“The combined sales team will be 10 times larger than National’s is today, and the portfolio will be exposed to more customers in more markets,” he said.
Schlatter, at National Semiconductor’s headquarters, said the company’s operating costs are largely fixed, so additional sales generated by Texas Instruments could be highly profitable.
She said the acquisition also will give engineers in both companies access to each other’s work.
Clark, at Bayside Wealth Management, said his analysts were surprised that Texas Instruments was willing to pay $6.5 billion for National, which has seen its annual revenue fall for the past few years.
At the same time, Clark said, National’s competitors have reported annual growth of about 3 percent.
Staff Writer Jonathan Hemmerdinger can be reached at 791-6316 or at: jhemmerdinger@mainetoday.com
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