ON Semiconductor to Buy Fairchild Semiconductor (FCS) for $2.4B

Chief Executive Officer, Keith Jackson said during the conference call that there is little product and revenue overlap between both the companies.

Arizona-based On Semiconductor has entered into an agreement to purchase Fairchild Semiconductor for $2.4 billion.

The deal is expected to close late in the second quarter of 2016.

Jackson said it was "inevitable" that there would be further consolidation in the industry.

Law office of Brodsky & Smith, LLC announces that it is investigating potential claims against the Board of Directors of Fairchild Semiconductor worldwide, Inc. No approval of the stockholders of ON Semiconductor is required in connection with the proposed transaction. They now own 114.79 million shares or 0.49% less from 115.36 million shares in 2015Q1. Longbow Research downgraded shares of Fairchild Semiconductor Intl from a "buy" rating to a "neutral" rating in a research note on Wednesday, September 9th.

The acquisition will create a new leader in the power segment of the semiconductor market. It has outperformed by 0.30% the S&P500. This marks a major revenue decline since 2012 when the market dwindled 2.6%.

In fact, over the past year, slowing growth and rising costs led to major deals in the chip industry.

Chinese company Tsinghua has spent more than $9.4 billion in the last couple of years, including the purchasing of stake in USA data storage company Western Digital Corp., and it also plans to invest $47 billion over the next five years.

In June, Intel Corporation (NASDAQ:INTC) reported that it anticipates to close $16.7 billion takeover of Altera Corporation (NASDAQ:ALTR) within six to nine months, whereas Avago Technologies (NASDAQ:AVGO) anticipates to close acquisition of Broadcom Corporation (NASDAQ:BRCM) in early next year.

Considering the overall scenario of the semiconductor market, ON semiconductor's merger with Fairchild looks justified. MXL, sporting a Zacks Rank #1 (Strong Buy).