* Deal valued at $1.6 bln in stock
* Offer of $9.73 per TriQuint share at 5.4 pct premium to
* RF Micro shares rise as much as 18 pct
* TriQuint's stock up as much as 23 pct
By Soham Chatterjee and Lehar Maan
Feb 24 Chipmaker RF Micro Devices Inc
will buy peer TriQuint Semiconductor Inc for about $1.6
billion to capture a larger share of the market for chips
supplied to Apple Inc and Samsung Electronics Co Ltd.
RF Micro's shares rose as much as 18 percent in early
trading on Monday.
TriQuint shares, which will be exchanged for 1.675 shares of
the merged entity, rose to $11.38.
The offer was valued at $9.73 per TriQuint share, which
represents a premium of 5.4 percent to the stock's Friday close.
TriQuint supplies radio frequency chips that help connect
cellphones to data and voice networks to Apple and
BlackBerry Ltd .
RF Micro, which makes amplifiers, power management,
switch-based products and filters used for broadband mobile
connectivity in smartphones, counts Samsung as its
"TriQuint is a very big supplier to Apple ... RFMD's got a
better relationship with Samsung. So it works both ways,"
Northland Securities analyst Tom Sepenzis said.
Smartphone users globally are expected to triple to 5.6
billion by 2019 from 2013, according to a study by telecom
networking equipment maker Ericsson. ()
Analysts said the deal would also bolster RF Micro's filters
products business, which makes chips that improve the quality of
"RFMD is good at power amplifiers and switches and now they
don't have to worry about filters. TriQuint is very good at
filters," Brokerage MKM Partners analyst Ian Ing said.
The deal will also boost RF Micro's offerings for the
networking infrastructure and aerospace-defense markets.
RF Micro's chips are used in broadband routers to provide
WiFi connectivity and in base stations installed by telecom
operators to transmit wireless network.
"Non-mobile business - we call the infrastructure and
defense business - we do see a very good joining of two
businesses and we think we are launching today is a $500 million
infrastructure business that is very attractive part of our
portfolio," TriQuint Chief Executive Ralph Quinsey said on a
Activist investor Starboard Value LP, which holds an 8
percent stake in TriQuint, asked the chipmaker last October to
consider selling or restructuring its mobile power amplifier
business and focus on the networks and defense businesses.
The deal, which will create a company with combined revenue
of more than $2 billion, is expected to save at least $150
million in costs, the two companies said at the Mobile World
Congress in Barcelona.
RF Micro shareholders will receive 1 share of the new entity
for each share held.
The company said it expected the tax-free deal to close in
the second half of 2014 and add to its adjusted profit in the
first full year following closure.
RF Micro Chief Executive Bob Bruggeworth will be the CEO of
the combined company, while TriQuint CEO Ralph Quinsey will
serve as the non-executive chairman.
TriQuint's Chief Financial Officer Steve Buhaly will be the
merged company's CFO.
RF Micro's shareholders will own about 50 percent of the new
company, with TriQuint shareholders owning the rest.
BofA Merrill Lynch was the financial adviser to RF Micro,
while Goldman Sachs advised TriQuint.
RF Micro's shares were up 15 percent at $6.69 on the Nasdaq.
TriQuint's stock was about 21 percent higher at $11.15.