In a statement, Keith Jackson, On Semi president and CEO, blamed the withdrawal on weakness in the financial markets and "the unforeseen deterioration in the semiconductor market" since the companies first proposed a $2.3 billion takeover bid for Atmel last month.

"As a result of ON Semiconductor's withdrawal, Microchip must also withdraw its $5 per share offer for Atmel," said Steve Sanghi, Microchip president, chairman and CEO. "However, Microchip intends to evaluate its potential alternatives for pursuing a transaction without ON Semiconductor."

As recently as last week, On Semi and Microchip had vowed to press on with the attempt to acquire Atmel, which had rejected the proposal.

Analysts long believed the proposal was unlikely to succeed, citing the financial climate which has prevailed over the past two months and the belief that the bid undervalued Atmel.

By: DocMemory
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