Texas Instruments acquires National Semiconductor for $6.5bn

Texas Instruments (TI) has acquired National Semiconductor in a multi-billion dollar deal.

The acquisition will see TI close the gap on market leader Intel, and will also boost its dominance in the analogue chip market.

Analogue chips are largely used in mobile phones and tablets.

The acquisition cost a total of $6.5bn (£4bn), which equates to $25 (£15.4) per share.

"This acquisition is about strength and growth," said Rich Templeton, TI's chairman, president and chief executive officer.

"National has an excellent development team, and its products combined with our own can offer customers a portfolio of unmatched depth and breadth," he added.

"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."

Following the acquisition the companies will have combined revenue of $14.5bn (£8.9bn), which will allow TI to jump to third place in the rankings of the world's largest semiconductor supplier.

TI is set to overtake Toshiba, who will fall to fourth place, but still remain behind dominant players Samsung Electronics and Intel, according to iSuppli Market Research.