Apple strikes $600m Dialog deal
Apple has agreed to buy a portion of chip supplier Dialog Semiconductor’s business in a $600 million (€518 million) deal, the two companies said yesterday, expanding the iPhone maker’s chip operations in Europe.
Since the first iPhones a decade ago, Apple has used Dialog power-management chips to manage their battery life. Apple is buying patents, a team of about 300 engineers, most of whom already worked on chips for Apple devices, and Dialog offices in Britain, Italy and Germany. Dialog said its 2018 revenue would not be affected and it would continue shipments of existing products to Apple. For now, the deal settles questions about future relations between Apple and Dialog, whose shares tumbled this year when it said Apple planned to use chips from another supplier, which was widely believed to be Apple itself. Dialog’s shares rose 17 per cent in pre-market trading in Frankfurt, as the Apple deal secured their business relationship for the next three years.
The Anglo-German chipmaker also said it would begin a share buyback programme for up to 10 per cent of its stock following its next quarterly trading update. Other chip designers in Europe have struggled to manage their relationship with Apple due to its sheer scale. Britain’s Imagination Technologies ended up being sold to a Chinese-backed investment fund last year after losing Apple as a client. Half of the deal’s value, or about $300 million (€259 million), is cash for the Dialog engineers and offices and the other $300 million is pre-payment to Dialog for supplying chips over the next three years. Dialog said it would continue to deliver chips to other customers, focusing on the automotive and internet-of-things markets.
“This transaction reaffirms our long-standing relationship with Apple, and demonstrates the value of the strong business and technologies we have built at Dialog,” chief executive Jalal Bagherli said.– Reuters