Business Finance

Apple announces the purchase of a part of Dialog’s business for 600 million dollars

Earlier on Thursday, 11 October 2018, In a joint statement, Apple Inc and Dialog went on to reveal that both companies have agreed upon a deal to buy supplier Dialog Semiconductor Plc’s business in a $600 million deal, thus, further expanding the iPhone maker’s chip operations in Europe.

Ever since the launch of the first iPhones nearly a decade ago, Apple has made use of Dialog power management chips to assist with its device’s battery life.

Under this latest deal, Apple would be hiring a team of nearly 300 engineers, and patents. Notably, most of these engineers already have an experience of working on chips for Dialog offices in Italy, Germany and Britain and also for Apple devices.

In a statement, Dialog said that this would not affect its 2018 revenue and will continue with shipments of products that are already in production to Apple.

In a joint statement, both companies went on to say, “Out of the total $600 million, half of it or nearly $300 million, is cash for the Dialog offices and engineers and the other $300 million would be pre-payment to Dialog for supplying chips for the upcoming three years.”

In a statement Dialog then said that it would not stop delivering chips to other customers, and also will focus on the internet-of-things and the automotive market.

Speaking on the announcement, Dialog CEO Jalal Bagherli said, “This deal is a reaffirmation of our long-standing relationship with Apple, and also illustrates the principles of the robust business and technologies we have developed at Dialog.”

This deal is a representation of the expansion plan of Apple’s chip design operations, that started in full throttle back in 2010 when the company launched its first custom processor for the iPhone and iPad.

Nearly 16 percent of Dialog’s workforce is being brought by Apple. Furthermore, in a statement, Apple stated that the acquired employees will continue working in Europe and report directly to Johny Srouji, senior vice president of hardware technologies Dialog, who supervises Apple’s chip design efforts.

Apple already has several chip design centres St Albans, Britain and Munich and with this deal being officiated it will see Apple acquiring four more from Nabern and Neuaubing in Germany, Swindon in Britain, and Dialog in Livorno in Italy.

According to Dialog, Linklaters was acting as its legal counsel and Qatalyst Partners was acting as its Financial Adviser.