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Investing.com-- ON Semiconductor Corporation (NASDAQ:ON) is considering a potential acquisition of Allegro Microsystems Inc (NASDAQ:ALGM) as part of an effort to expand its automotive chip business, Bloomberg reported on Sunday, citing sources familiar with the matter.
The Phoenix-based semiconductor company has been working with advisers in recent months to explore a deal, though Allegro (WA:ALEP) has not indicated whether it is open to a sale, the report said.
Other potential bidders could also emerge, particularly among chipmakers looking to strengthen their automotive offerings, according to Bloomberg.
Allegro, based in Manchester, New Hampshire, specializes in power and sensing semiconductor solutions used in automotive, industrial, and data center applications.
The news comes shortly after Allegro announced a leadership change, naming longtime executive Mike Doogue as CEO.
Allegro’s largest shareholder is Japan’s Sanken Electric Co Ltd (TYO:6707), which holds a 32% stake. Both companies officially declined to comment on the potential deal, Bloomberg reported.