In the industry's latest consolidation move, Dutch semiconductor company NXP has agreed to take over US-based Freescale. The deal will see the emergence of a new industry leader in the automotive chipmaking markets.
Eindhoven, Netherlands-based NXP Semiconductors said Monday it would acquire Texas rival Freescale and merge operations in a deal valuing the combined company at over $40 billion (35.7 billion euros).
It marks the biggest of four mergers this year in the semiconductor sector and provides yet another sign that chipmakers are regaining some of the confidence required to pursue big acquisition.
Reuters said the merger would create a new industry leader within the automotive and industrial semiconductor markets.
The two companies are expected to close the deal in the second half of this year. NXP is to fund the transaction with $1 billion of cash from its balance sheet, $1 billion of new debt and about 115 million of its shares.
Freescale shareholders will eventually own about 32 percent of the combined company.
NXP, which was spun off from Philips in 2006, now has operations in about 25 countries, logging revenue of $2.7 billion last year. Austin-based Freescale logged net sales of $4.6 billion in 2014.
hg/sgb (Reuters, dpa)