Despite recent rumors to the contrary, Atmel Corp. won’t be selling to China Electronics Inc., but rather to a European chipmaker. Dialog Semiconductor PLC is purchasing Atmel for $4.6 billion, the companies announced. Dialog ？ which calls Apple Inc. one of its biggest customers ？ said the deal will help it diversify more into the mobile, Internet of Things (connected devices) and car markets.  Dialog is headquartered in the United Kingdom but has shares listed in Germany.“The rationale for the transaction we are proposing today is clear ？ and the potential this combination holds is exciting,” said Dialog chief executive officer Jalal Bagherli in the press release. “By bringing together our technologies, world-class talent and broad distribution channels we will create a new, powerful force in the semiconductor space. Our new, enlarged company will be a diversified, high-growth market leader in mobile power, IoT (Internet of Things) and automotive.”The deal is part of ongoing consolidation of the semiconductor industry. For example, in May, Avago Technologies purchased Sunnyvale-based Broadcom Corp. for $37 billion, while Santa Clara``s Intel Corp. bought Altera Corp. for $16.7 billion at the end of May.

Atmel employs about 5,000 worldwide and its microcontrollers and other products are used in many market segments including: Industrial, automotive, consumer, communications and computing.The transaction will be funded with a combination of existing cash, $2.1 billion of new debt and the issuance to Atmel shareholders of approximately 49 million Dialog American Depository Shares. The transaction is expected to close in the first quarter of the 2016 calendar year.There still isn``t any indication of when Atmel``s president and CEO Steven Laub intends to retire, as he had said in late August that he was pushing back his plans to leave the company to "facilitate the completion of an ongoing strategic evaluation process."