GENEVA (AP) — Semiconductor maker STMicroelectronics NV said Tuesday that it has agreed to pay about $336 million for California-based Genesis Microchip Inc. in a cash deal that will expand its business as a supplier to the digital television market.
Shares of Genesis Microchip, which makes electronic components used in flat-panel displays, soared more than 56 percent in premarket trading on word of the deal.
In a news release, STMicroelectronics said it expects the deal will expand its position in the $1.5 billion digital TV market, which it said is one of the fastest growing segments in consumer semiconductors. It said the deal will also strengthen its product and intellectual-property portfolio.
Genesis, based in Alviso, Calif., had revenue of $191 million in the year ended Sept. 30. STMicroelectronics had revenue of $9.85 billion in 2006.
STMicro will offer $8.65 per share, a 60 percent premium on Monday's closing price for shares in Genesis. In premarket trading Tuesday, Genesis shares rose $3.05, or 56.5 percent, to $8.45.
Shares in STMicro fell 1.8 percent to 10.46 euros ($15.35) on the Paris exchange.
The acquisition has been approved by the Genesis board which unanimously recommended that shareholders accept the offer which should begin no later than next week.
The deal is also subject to regulatory approval.
On closing, Genesis will become part of STMicroelectronics' Home Entertainment and Displays Group. Elias Antoun will join STMicroelectronics and will lead STMicroelectronics' television and display initiatives, reporting to Philippe Lambinet.