Texas Instruments Buying Burr-Brown

Thursday, June 22nd 2000, 12:00 am
By: News On 6

DALLAS (AP) — Semiconductor giant Texas Instruments Inc. said Wednesday it will buy Burr-Brown Corp., a maker of semiconductors, for $7.6 billion in stock.

Dallas-based Texas Instruments said the deal will strengthen its position in analog technology used in cell phones, high-speed modems and Internet audio devices.

Burr-Brown, based in Tucson, Ariz., specializes in data converters, which change analog signals such as sound to digital form and then back to analog. The Semiconductor Industry Association estimates that sales of the devices will grow 25 percent this year. Burr-Brown also makes data amplifiers, which the industry trade group said will increase in sales by 45 percent.

Texas Instruments chief financial officer William Aylesworth said in an interview that the Burr-Brown and other recent acquisitions of analog-technology companies will complement its leadership in digital signal processor chips, or DSPs, which are used in about 70 percent of digital wireless phones.

``Every time a device like a cell phone uses a DSP to process data, it also needs analog chips to convert analog to digital and back and to amplify the signal,'' Aylesworth said. ``These are areas where Burr-Brown is a clear leader.''

Texas Instruments said the transaction wouldn't affect its earnings this year or next, and would add to earnings after that.

Burr-Brown makes high-end converters and amplifiers used in phones, personal computers, medical instruments and other devices. Texas Instruments' analog engineers ``really hadn't gotten to'' those areas yet, Aylesworth said, and the acquisition will allow the company to develop high-end expertise that otherwise would have taken it several years.

Burr-Brown has a manufacturing plant in Tucson and two technology development centers in Japan and Scotland. It has about 1,500 employees.

Directors of both companies have approved the purchase, which still requires approval of Burr-Brown stockholders. The companies said the deal should close by the end of the third quarter.

Texas Instruments said it will issue 88 million shares for Burr-Brown, exchanging each Burr-Brown share for 1.3 shares of its own stock. At Tuesday's closing prices, the offer represented a 56 percent premium for Burr-Brown shares.

In trading Wednesday, Texas Instruments shares rose 37.5 cents to $87.25 on the New York Stock Exchange, while Burr-Brown shares fell $2.75, or 3.7 percent, to $72.625 on the Nasdaq Stock Market.