LSI Logic snaps up Agere Systems for $4 bn  

BANGALORE: Semiconductor solutions provider LSI Logic, headed by Intel
veteran Abhi Talwalkar, has announced that it would acquire Agere Systems, the
former chip division of Lucent Technologies for $4 billion in stock. 

Under the terms of the agreement, Agere shareholders will receive 2.16 shares
of LSI for each share of Agere they own. Based on the closing stock price of LSI
on December 1, 2006, this represents a value to Agere shareholders of $22.81 per
share. 

While LSI's chips are found in hard drives, DVD recorders and other devices,
the company does not have a strong play in mobile devices. 

The Agere acquisition would boost LSI's business in chip solutions for cell
phones, MP3 players and portable media devices. 

The combined company, to be called LSI Logic Corporation, will offer a
comprehensive set of building block solutions including semiconductors, systems
and related software for storage, networking and consumer electronics products. 

The companies had combined revenue of $3.5 billion for the 12 months ended
September 30, 2006. The companies operate in more than 20 countries, with a
combined workforce of approximately 9,100 employees, including nearly 4,300
engineers. 

The companies together own a substantial patent portfolio consisting of more
than 10,000 issued and pending US patents. 

LSI Logic has been on a buying spree for the last two years and its most
recent buy-out was an Indian company- Metta Technology this November. 

“LSI and Agere share a rich heritage of innovation and thought leadership
in creating enabling technologies that bring people and information
together," said Talwalkar, LSI Logic president and chief executive officer.
"By joining forces, we expect the combined scale to enable us to extend our
franchises in our market segments, realize significant synergies and better
serve the needs of our collective customers, shareholders and employees." 

Talwalkar will serve as president and chief executive officer of the new
company, which will be headquartered in Milpitas, California, and will maintain
a significant presence in Allentown, Pennsylvania with various other locations
worldwide. 

LSI non-executive chairman James Keyes will continue as non-executive
chairman of the board of directors of the new company, which will be comprised
of nine members, with six being designated by LSI and three being designated by
Agere. 

The transaction is subject to the approval of shareholders from both
companies as well as customary closing conditions and regulatory approvals. The
companies expect the transaction to close in the first calendar quarter of 2007. 

Both companies have their R&D presence in India.