December 4, 2006, Milpitas, CA--LSI Logic and Agere Systems have entered into a definitive merger agreement under which the companies will be combined in an all-stock transaction with an equity value of approximately $4.0 billion. Under terms of the agreement, Agere shareholders will receive 2.16 shares of LSI for each share of Agere they own. Based on the closing stock price of LSI on December 1, 2006, this represents a value to Agere shareholders of $22.81 per share.
The combined company, to be called LSI Logic Corporation, will offer "a comprehensive set of building block solutions including semiconductors, systems and related software for storage, networking and consumer electronics products," according to a press release. The companies had combined revenue of $3.5 billion for the 12 months ended September 30, 2006. They operate in more than 20 countries, with a combined workforce of approximately 9100 employees, and together own a patent portfolio comprising more than 10,000 issued and pending U.S. patents.
The combination of LSI and Agere is anticipated to create a semiconductor and storage systems powerhouse with an unparalleled innovation pipeline and a broad array of competitive, customer-valued products and solutions in large and growing markets. LSI's well-established presence in the storage and consumer electronics markets and Agere's broad footprint in storage, mobility and networking should enable the combined company to drive sustainable long- term growth and shareholder value through the strengthening of its combined platforms and the expansion of its existing customer relationships.