Agere is one of the biggest makers of communication chips. They're being acquired by rival LSI Logic in a stock for stock deal--2.16 shares of LSI stock for each Agere share--$4 bl, or $22.81 a share, a 28% premium.
It's an important deal--Agere sells to Alcatel-Lucent, Nortel and especially Seagate and Samsung Electronics.
Both LSI and Agere count Seagate as a major customer. This would make the combined entity a major player in semiconductors for disk drives. As with many of these deals, cost synergies are a major driver--savings should reach at least $125 million annually.
Agere up 14%, LSI down 5% pre open.