Silicon vendor Texas Instruments (TI) has announced that it is to acquire fellow semiconductor player National Semiconductor in an all-cash deal that values National at $6.5bn. TI said the deal had the unanimous approval of the boards of both companies and is expected to close in the final quarter of the year.

TI said it was attracted by National’s portfolio of 12,000 analog semiconductor products, the strength of its business in the industrial power market and the quality of its customer design tools. Upon conclusion of the deal, sales of analogue semiconductors will account for almost half of TI’s revenue.

“This acquisition is about strength and growth,” said Rich Templeton, chairman of TI.  “National has an excellent development team, and its products combined with our own can offer customers an analogue portfolio of unmatched depth and breadth. Our ability to accelerate National’s growth with our much larger sales force is the foundation of our belief that we can produce strong returns on our investment.”

The firm said that the analogue semiconductor market was worth $42bn in 2010, with its own share at $6bn, or 14, per cent, putting it in first place. National turned in revenues of $1.6bn for 2010, equivalent to three per cent of the market.