New reorganization with power management, imaging and analog product lines

ON Semiconductor and Fairchild Semiconductor International jointly announced that ON Semiconductor has successfully completed its planned $2.4 billion cash acquisition of Fairchild.

“The acquisition of Fairchild advances our vision to be a premier supplier of power management and analog semiconductor solutions for a broad range of applications and end markets,” said Keith Jackson, ON Semiconductor’s president and CEO. “The acquisition of Fairchild provides a platform to significantly expand our profitability in an evolving semiconductor industry. The addition of Fairchild’s product line further enhances our industry-leading financial position.” “The integration of the two companies also positions us to create more stock value,” he said.

The tender offer by ON Semiconductor to purchase all of the outstanding shares of Fairchild’s common stock for $20.00 per share in cash on September 16, 2016 (the “Offer”) expired as scheduled one minute after 11:59 p.m. Eastern Time on September 16, 2016 and was not extended.

Computershare Trust Company, NA, the trustee for the Offer, has notified ON Semiconductor that as of the close of business on September 16, 2016, approximately 87,979,761 shares of Fairchild common stock (excluding 7,327,977 shares tendered pursuant to the Warranted Delivery Notices and not yet delivered), representing approximately 76.6% of the outstanding shares of Fairchild common stock, had been validly tendered and not properly withdrawn pursuant to the Offer.

On the 19th day, all of the shares above (and any additional shares tendered by way of delivery warrants, except in the event that actual delivery does not occur) were irrevocably accepted and paid for in accordance with the terms of the Offer and the Merger Agreement.

Immediately following payment of the tendered shares, ON Semiconductor completed the acquisition by merging Fairchild into a wholly owned subsidiary of ON Semiconductor, whereby all remaining Fairchild shares (other than those directly owned by ON Semiconductor, Fairchild, or their respective subsidiaries and those held by stockholders who have a claim to ownership of such shares and have a proper claim to valuation thereof under Delaware law) were converted into the right to receive $20.00 per share in cash, less interest and applicable withholding taxes – the same price paid in the tender offer. Upon completion of the transaction, Fairchild will no longer be a publicly traded corporation, its common stock will no longer be traded on NASDAQ, and Fairchild will become a wholly owned subsidiary of ON Semiconductor.

Meanwhile, the transaction is expected to be immediately accretive to ON Semiconductor's non-GAAP EPS. ON Semiconductor expects to achieve annual cost savings of $150 million by the end of 2017 and $200 million by the end of 2018. The cost savings targets are based on Fairchild's 2015 results.

With this acquisition, ON Semiconductor announced that it is reorganizing its portfolio, which has been built up over many years, into a new organization that manages differentiated power management, imaging and analog solutions. The new organization is comprised of three groups: the Power Solutions Group, led by Bill Hall; the Analog Solutions Group, led by Bob Klosterboer; and the Image Sensor Group, led by Taner Ozcelik. The existing System Solutions Group will be absorbed into the three new groups.