Agere Buyout Moves a Step Ahead: Its Acquisition By LSI Logic Gets Federal Antitrust Approval.

By Kurt Blumenau, The Morning Call, Allentown, Pa.

Jan. 20–The purchase of Agere Systems by a California company passed federal muster Friday, clearing the antitrust review that is a common part of major business takeovers.

The announcement removes one potential hurdle to LSI Logic Corp.’s purchase of Agere, the Hanover Township, Lehigh County, chipmaker that is the Lehigh Valley’s largest high-tech employer. Agere employed about 1,500 people in Lehigh and Northampton counties at the end of last year.

The deal still requires shareholder approval on both sides. Agere spokesman Bob Guenther said the company has not scheduled a special shareholders’ meeting.

An LSI spokeswoman could not be reached for comment at the company’s headquarters in Milpitas, Calif. LSI, like Agere, makes semiconductors.

Guenther said the deal is still on track to close in the first three months of the year, probably in March. LSI will comment on the progress of closing on Wednesday during its earnings conference call, the company said in a statement.

The combined company will keep the LSI name and be based in California. It will consist of five main product areas, run by three executives from LSI and two from Agere. Top Agere officials slated to stay with the company include General Counsel Jean Rankin and Denis Regimbal, head of the group that makes chips for cell phones and other mobile electronics products. LSI has said it will keep Agere engineers in the Valley, but has not said how many it will keep.

The sale agreement, announced Dec. 4, calls for Agere shareholders to receive 2.16 shares of LSI for each share they own of Agere stock.

LSI stock closed Friday at $10.26 per share, while Agere stock closed at $21.95, both on the New York Stock Exchange. At that rate, 2.16 shares of LSI stock would be worth $22.16, giving Agere investors a premium of 21 cents per share, or less than 1 percent. The premium stood at 28 percent on the day the deal was announced, but has been eroded by a rise in Agere’s stock value.

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Copyright (c) 2007, The Morning Call, Allentown, Pa.

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