Last Thursday, Apple announced that it has entered into a deal to buy some parts of Dialog Semiconductor, a European iPhone chipmaker, in a deal that is valued at approximately $600 million (£454 million).
Apple will gain some of the patents as well as a team of engineers from the chip designer. It will also guarantee a three-year contract for Dialog to continue building the chips for the iPhone and iPad products of the tech giant.
The said transaction is considered as the largest of its kind that is ever entered by Apple, beating out the $350 million acquisition of Primesense, the Face ID pioneer, way back in 2013.
The share price of Dialog in Germany increased to as high as 34 percent as the news of the said acquisition was released. It was able to recover some of the losses that it took when it said that Apple was planning to use other manufacturers for the chips used in its products in future.
The sales to Apple count for approximately three-quarters of the annual revenue of the company, which it expects to decrease to around 35 to 40 percent in 2022.
In an interview with Reuters, Jalal Bagherli, its chief executive, said that he now intends to concentrate on creating a “managed, smooth” transition of Dialog Semiconductor as it starts to expands into new territories, including the sector of the Internet of Things which houses products including watches and smart speakers.
Some of the 300-strong team that is heading to Apple will come from the offices of Dialog in Swindon, as well as Germany and Italy. It is believed that they will be joining the existing chip design centres of Apple in Munich and St Albans.
The deal is expected to close in the first half of the coming year. Dialog is anticipating annual operational savings that will amount to around $35 million from the said deal. A share buyback programme will now be initiated for up to 10 percent of the stocks of Dialog, after its next quarterly trading update.