1999-06-03
Business News From Philips Semiconductors

Royal Philips Electronics (NYSE:PHG), today announced the expiration of its $21.00 per share cash tender offer for all of the outstanding shares of VLSI Technology, Inc. (Nasdaq: VLSI). The offer expired at 12:00 midnight, Eastern Standard Time, on Tuesday, June 1, 1999. All shares validly tendered and not properly withdrawn prior to the expiration have been accepted for payment and will be paid promptly. The tender offer was made through Philips' indirect wholly owned subsidiary, KPE Acquisition Inc.

In excess of 42.1 million shares were tendered in the offer prior to its expiration, which when combined with the VLSI shares already owned by Philips constitutes approximately 91.5 per cent of VLSI's outstanding shares. The shares tendered include approximately 2.1 million shares (less than 4.5 per cent of the outstanding) tendered pursuant to Notices of Guaranteed Delivery. Philips will acquire the remaining shares of VLSI pursuant to a merger of KPE Acquisition with and into VLSI, and VLSI will thereby become an indirect wholly owned subsidiary of Philips.

Arthur van der Poel, chairman of Philips Semiconductors, said: "We are delighted to bring our tender offer to this successful conclusion, and warmly welcome the VLSI employees to Philips Semiconductors. Adding VLSI's digital expertise to Philips Semiconductors, particularly their ASIC design capabilities, will benefit the customers of both companies, strengthen our position in the U.S. and create numerous growth opportunities. VLSI has the technology, know-how and people in place to help further the strategy of Philips Semiconductors."

VLSI and Philips Semiconductors have complementary operations with almost no product overlap. VLSI has expertise and capabilities in digital wireless communications, computer networking and ASICs (application-specific integrated circuits). Philips Semiconductors' has expertise in wireless, multimedia, automotive and consumer electronics.

For further information:
Philips Media Relations
Jeremy Cohen, tel. +31 20 59 77213, email:  Jeremy.Cohen@philips.com