Info Image

Dutch Chipmaker NXP Buys Freescale for $11.8B to Expand Market in Chips for Self-Driving Cars

Dutch Chipmaker NXP Buys Freescale for $11.8B to Expand Market in Chips for Self-Driving Cars Image Credit: Freescale

Dutch chipmaker NXP Semiconductors has entered into an agreement to acquire its US rival, Austin-based Freescale semiconductor for about $11.8 billion in cash and stock. The combined entity will be lead by Richard Clemmer, NXP's current CEO as President and Chief Executive Officer. At the same time, Freescale shareholders will own approximately 32 percent of the combined company.

The merger is reported to create a high performance mixed signal semiconductor industry leader, with combined revenue of more than $10 billion anually. The transaction is expected to close in the second half of 2015. NXP intends to fund the transaction with $1.0 billion of cash from its balance sheet, $1.0 billion of new debt and approximately 115 million NXP ordinary shares. 

Richard Clemmer, NXP Chief Executive Officer 
Today’s announcement is a transformative step in our objective to become the industry leader in high performance mixed signal solutions. The combination of NXP and Freescale creates an industry powerhouse focused on the high growth opportunities in the Smarter World. We fully expect to continue to significantly out-grow the overall market, drive world-class profitability and generate even more cash, which taken together will maximize value for both Freescale and NXP shareholders.

Gregg Lowe, Freescale Semiconductor President and Chief Executive Officer
We believe this merger, which combines two highly successful and complementary companies, will create significant value for Freescale’s and NXP’s shareholders, customers and employees. Both companies have built leadership positions and have a sharp focus on delivering superior value to customers. Our combined scale, size and global reach will position our new company to deliver sustainable above market growth. It will also serve to accelerate the strategic plans both companies have invested in, enabling us to deliver more complete solutions to customers.

Author

Ray is a news editor at The Fast Mode, bringing with him more than 10 years of experience in the wireless industry.

For tips and feedback, email Ray at ray.sharma(at)thefastmode.com, or reach him on LinkedIn @raysharma10, Facebook @1RaySharma

PREVIOUS POST

Cavium Buys Switching and SDN Specialist Xpliant For US$90m

NEXT POST

HP Acquires Aruba Networks for $2.7B to Accelerate Proposition in Converged Campus Network