WEDNESDAY, 17 OCT 2018

 

CONNECT

Facebook Linked In Twitter
INB_1000_Eng_03/08-15/11_728x90px
GloriaJeans_266x90px
IMH LTD

Prodromou: Cyprus Satisfied with UNSG's Report on his Good Offices Mission

Angelides: Cyprus and Egypt Willing to Upgrade their Defence Cooperation

IMH LTD
CIFA_12/10-13/11_468x60px

INTERNATIONAL

brought to you by CIPA

Apple to Buy Part of Supplier Dialog's Business in $600 Million Deal

Apple to Buy Part of Supplier Dialog's Business in $600 Million Deal

Apple Inc is to buy part of Dialog Semiconductor Plc’s business in a $600 million deal, expanding the iPhone maker’s chip operations in Europe and securing the German-listed company’s role as a supplier to the U.S. tech group, Reuters reports.

Dialog’s shares rose by 34 percent in Frankfurt early on Thursday as the deal settles questions about future relations between Apple and Dialog, whose stock tumbled earlier this year when it said Apple planned to use chips from another supplier.

The acquisition is unusual for Apple, which rarely does such deals, and is larger than previous transactions. Apple bought Israel’s PrimeSense, creator of the facial recognition application used to unlock newer iPhones, for about $350 million in 2013.

Since the first iPhones a decade ago, Apple has used Dialog power-management chips to manage their battery life. Under the deal, Apple is buying patents, a team of about 300 engineers, most of whom already worked on chips for Apple devices, and Dialog offices in Britain, Italy and Germany.

Dialog said its 2018 revenue would not be affected and it would continue shipments of existing main power management integrated circuits (PMICs) to Apple. It expects to sell current and future generations of so-called sub-PMICs to Apple.

“We are not selling our PMIC business,” Chief Executive Jalal Bagherli told analysts.

After the deal, Dialog expects Apple to account for 35-40 percent of its total revenues in 2022. That is down from around 75 percent in the current year. Headcount will fall to 1,800.

The Anglo-German chipmaker also said it would begin a share buyback program for up to 10 percent of its stock following its next quarterly trading update.

Other chip designers in Europe have struggled to manage their relationship with Apple due to its sheer scale. Britain’s Imagination Technologies ended up being sold to a Chinese-backed fund last year after losing Apple as a client.

Shares in Austria’s AMS, which competes with Dialog in areas such as power-management chips, fell by 3.8 percent.

Half of the deal’s value, or about $300 million, is cash for the Dialog engineers and offices and the other $300 million is pre-payment to Dialog for supplying chips over the next three years, the companies said.

Dialog said it would continue to deliver chips to other customers, focusing on the automotive and internet-of-things markets, among others.

It forecast that its sub-PMIC business would achieve compound annual growth rates of 30-35 percent between 2018 and 2022. Its AMS, Connectivity and Automotive & Industrial business would grow at a 10-15 percent rate.

The deal represents an expansion of Apple’s chip design operations, which kicked into high gear in 2010 when the company released its first custom processor for the iPad and iPhone.

Apple is buying about 16 percent of Dialog’s workforce. Apple said these employees would stay in Europe and would report to Johny Srouji, the company’s senior vice president of hardware technologies who oversees Apple’s chip design efforts.

“Our relationship with Dialog goes all the way back to the early iPhones, and we look forward to continuing this long-standing relationship with them,” Srouji said. Apple has added around 20,000 employees in Europe since 2000. It already has a chip design centers in Munich, Germany, where it employs 1,000 staff, and St Albans, Britain. The deal will give Apple four more from Dialog, in Livorno in Italy, Swindon in Britain, and Nabern and Neuaubing in Germany.

The transaction is expected to close in the first half of 2019, subject to customary closings and regulator approvals, Dialog said. It expects savings of $35 million in annual operational expenses from the deal, but declined to give more detail on its financial impact ahead of an investor presentation on November 1st.

Dialog said Qatalyst Partners was acting as financial adviser and Linklaters was acting as its legal counsel.

 

MORE ON INTERNATIONAL

Annual inflation Up to 2.1% in the Euro Area

The Euro area annual inflation rate was 2.1% in September 2018, up from 2.0% in August. A ...

Superdry in Profit Warning after Heatwave Hits Sales

Superdry shares have sunk by almost 30% after warning that profits will take a £10m ...

The £50 Note is Changing and Here's Why

The £50 note will not be scrapped and will instead get a plastic redesign, the Bank ...

FROM AROUND GOLDNEWS

   

Current Developments in the Funds Industry

All around the world, the funds industry is constantly growing and is currently one of the hubs the local industry is promoting. Regulatory developments in the ...
   

Annual inflation Up to 2.1% in the Euro Area

The Euro area annual inflation rate was 2.1% in September 2018, up from 2.0% in August. A year earlier, the rate was 1.5%. European Union annual inflation was ...
   

Audi Fined £700m Over Diesel Emissions Scandal

Audi has been fined €800m (£700m) to settle an investigation by German prosecutors into breaches of diesel emissions rules. The premium car ...
   

Netflix Hits New Subscriber Record

Netflix added seven million new customers in the three months to September, bringing its global total to more than 137 million. The stronger than expected ...
   

Arrivals and Departures of Travellers Increase in August

Arrivals of travellers in August 2018 reached 733.078 compared to 702.535 in August 2017, recording an increase of 4.3%, the Statistical Service of Cyprus ...
   

Angelides: Cyprus and Egypt Willing to Upgrade their Defence Cooperation

Defence Ministers of Cyprus and Egypt, Savvas Angelides and Mohamed Zak, have expressed the two countries` will to upgrade their defence cooperation, that is ...
   

Prodromou: Cyprus Satisfied with UNSG's Report on his Good Offices Mission

The Republic of Cyprus has expressed its satisfaction with the UN Secretary General`s report on his good offices mission, that was released on Monday 16 ...
   

Building a United Front on Financial Crimes

Financial institutions are concerned about cybercrimes, but don’t know how best to prevent them. In PwC’s 2018 Global State of Information Security ...
 

YOUR COMMENTS

HEADLINES

MOST POPULAR

Infocredit_01/08-30/11_300x250px
Dale_Carnegie_Transformation_300x250px

IMH LTD