Meridian Capital Agrees to Buy Northgate Semiconductor in $18 Billion Deal

Meridian Capital has agreed to acquire Northgate Semiconductor for $18 billion in cash, the two companies said, in the largest deal the chip sector has seen in three years and one of the clearest signs yet that investors expect demand for specialized processors to outlast the current spending cycle.

Under the terms of the agreement, Northgate shareholders will receive $94 a share, a premium of roughly 28% over the stock's average price during the past month. The boards of both companies have approved the transaction, which is expected to close in the second half of next year pending regulatory review in the United States and Europe.