onsemi Proposes to Acquire Allegro MicroSystems

onsemi has made public its proposal to acquire Allegro MicroSystems for $35.10 per share in cash, valuing the company at approximately $6.9 billion. The move follows months of attempts by onsemi to initiate discussions with Allegro, with its latest offer—submitted on February 12, 2025—marking an increase from an initial $34.50 per share bid in September 2024.

Onsemi claims that by merging two very complimentary companies, the acquisition would result in a stronger semiconductor industry participant. With its own intelligent power and sensing solutions, the business finds Allegro’s leadership in magnetic sensing and power ICs for automotive and industrial industries strategically suited. Onsemi thinks the combined portfolio would improve its position in industrial, automotive, and artificial intelligence data center uses.

To underline the strategic relevance of the deal, onsemi also clarified its choice to make the proposal public, saying that although it had preferred secret negotiations, finally, transparency was chosen. Declaring that the offer optimizes value for Allegro owners, the business advised Allegro’s board to have conversations.

According to the press release, the combination between onsemi and Allegro would create a natural strategic fit given both parties’ respective strengths within the automotive and industrial markets:

Clear Path to Completion and Plan for Financing: onsemi has assembled a team of highly experienced advisors and is prepared to move swiftly and efficiently to complete due diligence and negotiate a mutually agreeable definitive agreement. The company does not anticipate any financing contingencies and intends to fund the potential transaction with a combination of committed financing, cash on hand, and funds available under its existing revolving credit facility.

Compelling Strategic Rationale That Delivers Benefits for Customers and Employees: Allegro’s product offering complements onsemi’s leadership in intelligent power and sensing for automotive, industrial and AI data center applications. A combination would bring together two strong teams with a shared culture of innovation and access to exciting new development opportunities within an expanded organization.

Delivering Immediate and Certain Value for Allegro Shareholders: Under the terms of the Proposal, onsemi’s all-cash $35.10 per share offer represents a 57% premium to Allegro’s closing share price on February 28, 2025, the last trading day prior to media reports regarding onsemi’s interest in acquiring Allegro.