Anne-Francoise Pele
K.C. Krishnadas
EE Times Europe
((12/11/2007 4:35 $ EST)

PARIS  European chipmaker STMicroelectronics NV (Geneva, Switzerland) announced its intention to make an agreed cash offer of $8.65 per share to acquire Genesis Microchip Inc. (Mountain View, California). The total equity value amounts to about $336 million.

Under the terms of the agreement, ST indicated that the offer represents a 60-percent premium to Genesis' closing share price on Monday (Dec. 10) and a 26-percent premium to the company's average share price in the last 60 days prior to the announcement.

The acquisition has been approved by Genesis' board of directors, and is expected to be completed in the first quarter of 2008. ST specified it would finance the acquisition using existing cash on its balance sheet.

Through this acquisition, ST said it intends to strengthen its position as "a semiconductor technology leader in the consumer electronics market", and more precisely in the $1.5 billion digital TV market.

"We expect to enhance and strengthen ST's product offering and capabilities in the digital TV market," confirmed Alain Dutheil, ST's chief operating officer in a press and analysts conference on Tuesday (Dec. 11). "We believe this agreement will further improve ST's positioning as a digital consumer platform supplier."

Dutheil specified that the proposed acquisition precisely respects the company's acquisition strategy. He declared: "First, Genesis is a leader in the digital TV image processor market, a key area within digital TV, as well as flat panel displays and digital interconnect market. Secondly, Genesis sales are predominantly to top OEMs in the US and in Asia, thereby expanding ST's presence in these two important geographic markets. Genesis is fabless thus enabling us to further emphasize our assets light strategy. This acquisition creates value for ST and our shareholders."

"STMicroelectronics is a leader in digital consumer technologies, with a strong position in set-top box compression and decompression technologies and "front end" processing technologies in digital TV. Genesis is a leader in "back-end" image and video processing and digital interconnect technologies," stated Philippe Lambinet, corporate vice president and general manager of STs' Home Entertainment & Displays Group.

He added: "The combined company will have the products, technology, IP and expertise to offer best-in-class integrated DTV processing solutions that our customers are increasingly demanding. We also believe that the Genesis DisplayPort technology brings expanded opportunities to the PC and home entertainment markets."

For the twelve months ended September 30, 2007, Genesis reported revenues of $191 million. As of September 30, 2007, Genesis said its cash and cash equivalents and short-term investments totaled approximately $183 million.

Genesis has offices in the United States, Canada, India, Taiwan, South Korea, China, Japan and Singapore. It employs 650 people and counts 210 US and foreign patents.