Dialog Semiconductor and Atmel announced that Dialog has agreed to acquire Atmel in a cash and stock transaction for total consideration of approximately $4.6 billion.

The combined company will address a market opportunity of approximately $20 billion by 2019.

The transaction is not subject to a financing condition. Dialog has received a financing commitment from Morgan Stanley Senior Funding in connection with the acquisition. The financing commitment includes a $2.1 billion senior secured credit facility.

Morgan Stanley acted as Dialog’s exclusive M&A transaction advisor. Davis Polk & Wardwell and Reynolds Porter Chamberlain served as Dialog’s legal advisors. Qatalyst Partners acted as exclusive M&A transaction advisor to Atmel. Jones Day served as Atmel’s legal advisor.

“The rationale for the transaction we are proposing today is clear &emdash; and the potential this combination holds is exciting. By bringing together our technologies, world-class talent and broad distribution channels we will create a new, powerful force in the semiconductor space. Our new, enlarged company will be a diversified, high-growth market leader in mobile power, IoT and automotive. We firmly believe that by combining power management, microcontrollers, connectivity and security technologies, we will create a strong platform for innovation and growth in the large and attractive market segments we serve. This is an important and proud milestone in the evolution of our Dialog story,” said Jalal Bagherli, Dialog chief executive officer.

“This transaction combines two successful companies and will create significant value for Atmel and Dialog shareholders, customers and employees. Adding Dialog’s capabilities in power management with Atmel’s keen focus on microcontrollers, connectivity and security will enable Dialog to more effectively target high-growth applications within the mobile, IoT and automotive markets,” said Steven Laub, Atmel president and chief executive officer.