UK Edition
Apple shores up chipmaker Dialog's future as pair strike $600m deal
Apple has struck a $600m (£455m) deal to buy a portion of Dialog Semiconductor and enter into new supply deals with the Reading-based company, quashing fears that it would be ditched by the iPhone maker.
Apple is paying $300m to buy some of Dialog's assets, including its Swindon office and sites in Italy and Germany, where there are more than 300 employees working on research and development.
Apple will transfer a further $300m to Dialog as a pre-payment for products to be delivered over the next three years, and the pair have struck a "broad range of new contracts" for the development and supply of semiconductor chips.
Shares in Dialog surged more than 30pc on Thursday morning, as investors welcomed the clarity the deal provides over the company's future.
The company had been thrown into tumult earlier this year, as rumours suggested it could become another victim of Apple's efforts to reduce its reliance on suppliers.
Earlier this year, Dialog admitted that Apple had the "resources and capability" to design its own power management chips and "could potentially do so in the next few years", compounding fears that the iPhone maker was weighing up whether to ditch Dialog.
Apple, which accounts for around three quarters of Dialog's revenue, had already dropped British microchip company Imagination Technologies in favour of taking its graphics technology in-house.
That decision had led to Imagination threatening legal action against Apple, although the dispute was later called off after Imagination was bought by Beijing's Canyon Bridge Partners.
Speaking about the tie-up with Apple on Thursday, Dialog chief executive Jalal Bagherli said the deal gave it a "clear strategic focus", and was in the "best interests of [its] employees and shareholders".
The deal is expected to complete in the first half of 2019. Qatalyst Partners acted as financial advisor and Linklaters as legal counsel to Dialog.