MILPITAS, Calif., March 26, 2001 - LSI Logic Corporation (NYSE: LSI) and C-Cube Microsystems Inc. (Nasdaq: CUBE) today announced a definitive merger agreement in which LSI Logic has agreed to acquire C-Cube in a stock-for-stock transaction valued at approximately $878 million. In the transaction, each outstanding share of C-Cube common stock is to be exchanged for 0.79 of a share of LSI Logic common stock.
LSI Logic anticipates completing the transaction in its second quarter ending June 30, and expects the transaction to be accretive to the company's earnings before goodwill amortization (EBG) in 2001.
"The acquisition of C-Cube will enhance LSI Logic's technology strengths in designing and manufacturing complete solutions for customers in rapidly growing communications and broadband entertainment markets," said Wilfred J. Corrigan, LSI Logic chairman and chief executive officer. "Both companies bring complementary technologies and market channels to the broadband entertainment market. The synergy of these two technology leaders is consistent with our business strategy of capitalizing on the convergence of worldwide communications and broadband entertainment."
C-Cube, which pioneered the MPEG digital video standards, is a leading silicon provider for digital set-top box, DVD and emerging CODEC-based applications, such as personal video recording (PVR), home media servers, recordable DVD, residential gateway and streaming video.
The combination of LSI Logic and C-Cube provides a complete portfolio of technologies for high-growth cable, satellite, terrestrial and DSL set-top box markets.
"I am excited about the tremendous synergies between C-Cube's and LSI Logic's products, markets and customers in the broadband entertainment market," said Umesh Padval, C-Cube president and chief executive officer. "LSI Logic complements C-Cube very well in achieving the leading position in the networked digital home."
C-Cube's customers in its target markets include: Sony, Samsung, LG Electronics, JVC, Motorola, Pace and Philips. C-Cube, which reported $265 million in revenues in 2000, employs nearly 600 worldwide and is headquartered in Milpitas, California.
Under the terms of the definitive merger agreement, LSI Logic will first commence an exchange offer whereby it will offer 0.79 of a share of LSI Logic common stock for each outstanding share of C-Cube common stock. The exchange offer will be followed by a merger in which LSI Logic would acquire, at the same exchange ratio, the remaining shares of C-Cube common stock not previously acquired in the exchange offer. Upon completion of the merger, all outstanding options to purchase C-Cube common stock will be assumed by LSI Logic and converted into options to purchase LSI Logic common stock.
The transaction is expected to be accounted for under the purchase method of accounting and to qualify as a "tax-free" reorganization for federal income tax purposes. The merger is subject to the satisfaction of customary closing conditions, including the tender for exchange of at least a majority of C-Cube's outstanding shares (including for purposes of the calculation of the majority of shares, certain outstanding options and warrants to purchase C-Cube shares) and the expiration or termination of the waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act and applicable foreign antitrust laws.
About C-Cube Microsystems
C-Cube Microsystems (Nasdaq:CUBE) is a worldwide leader in digital media processing and is the leading the way with new communication processors and networked consumer products. With a focus on DVD, set-top boxes and CODEC enabled products, C-Cube is driving the technology for the "networked digital home."
C-Cube is headquartered in Milpitas, California and has offices in North America, Europe and Asia. For more information please visit our web site at http://www.c-cube.com/.
About LSI Logic
LSI Logic Corporation (NYSE: LSI) is a leading designer and manufacturer of communications and storage semiconductors for applications that access, interconnect and store data, voice and video. In addition, the company supplies storage network solutions for the enterprise. LSI Logic is headquartered at 1551 McCarthy Boulevard, Milpitas, CA 95035, 408-433-8000, http://www.lsilogic.com/
Forward-Looking Statements are omitted