Dialog Semiconductor plc fell the most in almost seven years in Frankfurt trading after agreeing to buy Atmel Corp. for about $4.6 billion -- more than its own market value -- to expand into the automotive industry and everyday objects that are increasingly connected to the Internet.

The cash-and-share offer for San Jose, California-based Atmel, a maker of chips used in industrial machinery and cars, values the target at $10.42 a share, or 43 percent more than the stock’s last closing price. Strategic buyers on average paid a premium of 19 percent in comparable chip-industry transactions in the past 12 months, according to data compiled by Bloomberg.

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