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Tower Semiconductor Ltd. (NASDAQ: TSEM: Summary, Messages, Articles) ended the week on a high note by announcing its merger with Jazz Technologies. The merger means the new company, Jazz Semiconductor, is created as a wholly-owned subsidiary of Tower Semiconductor. Tower is a specialty wafer foundry, while Jazz is a well-known specialist in Analog-Intensive Mixed-Signal Foundry solutions.

“We expect the merger of the two companies to provide expanded opportunities for growth based on the significant cross-selling opportunities and the broader, more complete product, technology, and service portfolio we are now able to offer to customers,” said Tower CEO Russell Ellwanger. “[We expect] significant improvements to our financial results, EBITDA and cash flow margins.”

In the move, Jazz Chairman and CEO will retire and begin to serve as a special advisor to the new Board of Directors. Ellwanger has been named chairman of the Jazz board of directors and is responsible for developing the final merger plan and structure in the coming months.

“More than 66 percent of our stockholders voted in favor of this merger and less than one percent voted against it,” Pittman said. “We look forward to working with Tower to enhance our corporate value for the benefit of Tower’s stockholders.“

Tower gains Jazz’s major customers that include Conexant Systems, Entropic, Marvell Technology Group, Mindspeed Technologies, RF Micro Devices, Skyworks Solutions and Texas Instruments. That lists complements Tower’s major customers such as Atheros Communications, International Rectifier, Macronix International, On Semiconductors, SanDisk Corporation, Siliconix-Vishay and Zoran Corp.

“Tower and Jazz together now provide one of the industry’s broadest portfolios of specialty process technologies combining Tower’s offerings in CMOS image sensor, non-volatile memory (NVM) and CMOS (RF and power) with Jazz’s expertise in mixed signal, power management (CMOS and BCD) and RF (RF CMOS, SiGe and BiCMOS),” a news release states.

Under the terms of the merger, Tower acquired all of the outstanding shares of Jazz in a stock-for-stock transaction. Upon the closing of the merger, each outstanding share of Jazz common stock was converted into 1.8 Tower ordinary shares. On Friday, Jazz’s stock ceased to be traded on the American Stock Exchange.

“Technology leadership and scale are critical in meeting the unique requirements of our customers,” Ellwanger said, “and with the merger now complete, we will continue to focus on customer needs for increased capacity, expanded process offerings and industry-leading design enablement services.”

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