ON Semiconductor Agrees To Sell Ignition IGBT Biz To Clear FTC Requirement For Acquiring Fairchild

ON Semiconductor Corp ON agreed to divest its Ignition IGBT unit to get clearance from the Federal Trade Commission on its planned acquisition of Fairchild Semiconductor Intl Inc FCS for $2.4 billion. This has increased the chances for anti-trust approval from the FTC, and subsequently has sent the stock higher.

The regulator found that a merged entity would enjoy a share of more than 60 percent in the Insulated-Gate Bipolar Transistors global market, particularly designed and calibrated for automotive ignition systems. Because of this, the FTC thinks that a merger, without the sale of IGBT unit, would have lessen the competition considerably thus resulting in increased prices and reduced innovation.

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According to the FTC, "The proposed consent order, preserves competition by requiring ON to divest its Ignition IGBT business to Chicago-based manufacturer Littelfuse, Inc. within 10 days of the close of the transaction. The divestiture will include design files and intellectual property that Littelfuse needs to manufacture ON's Ignition IGBTs".

At time of writing, Fairchild was up 0.86 percent to $19.90 while ON was up 2.8 percent to $11.01.

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