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Microchip Technology Inc. acquired Atmel Corp. for $3.56 billion. According to Atmel, Microchip's offer outbid its agreement with Dialog Semiconductor PLC.

The Wall Street Journal reported that Microchip's deal is $8.15-a-share in cash and stock. Microchip would also include a $7 per share cash component in the deal. Meanwhile, Dialog's initial offer for Atmel during the September announcement was $4.6 billion worth of cash-and-stock. However, Dialog's share price dropped after that. Dialog's cash component is only at $4.65 per share.

"As the semiconductor industry consolidates, Microchip continues to execute a highly successful consolidation strategy with a string of acquisitions that have helped to double our revenue growth rate compared to our organic revenue growth rate over the last few years," said Microchip President and CEO Steve Sanghi in a report by Street Insider. "The Atmel acquisition is the latest chapter of our growth strategy and will add further operational and customer scale to Microchip," said Steve Sanghi, President and CEO of Microchip."

Microchip expects a sale of about $552 million, which is higher than its initial $539.7 million to $563.5 million expectation.

Bloomberg News wrote that the announcement of the merger is the last stage of the bidding for Atmel, which is based in San Jose, California. 2015 has been a year of semiconductor acquisitions and mergers. The mergers among chipmakers are driven by the increasing costs of producing chips and the declining number of customers for this product.

Margin pressure has led to a series of consolidation in the semiconductor business. On 2015, NXP Semiconductors NV acquired Freescale Semiconductor Ltd. for a value of $11.8 billion. Intel Corp bought Altera Corp for a price of $16.7 billion. Meanwhile Avago technologies Ltd's $37 billion acquisition deal for Broadcom Corp. is expected to be finished February 1.

Atmel also got an offer from Cypress Semiconductor Corp., which is also a chipmaker from California. Atmel is valuable for its microcontrollers that have powerful computing capabilities that are useful for consumer and business hardware.