NXP Semi Is Buying Freescale For $11.8 Billion
TipRanks | Mar 04, 2015 09:41AM ET
On March 2nd, NXP Semiconductors NV (NASDAQ:NXPI) announced plans to acquire its competitor, Freescale Semiconductor Ltd (NYSE:FSL), in a deal valued at $11.8 billion in cash and stocks. The merge will propel NXP-Freescale into the top tier of semiconductor companies worldwide, in terms of both revenue and annual sales.
Both semiconductor companies create chips that are used in wireless infrastructure and computing, but Freescale has a strong foothold in automotive chips. As sensors, automatic braking technology, and cameras become more commonplace, even mandatory, in cars, NXP-Freescale is positioning itself to become a powerhouse in the automobile chip industry.
A statement released by NXP detailed that current Freescale shareholders will receive $6.25 in cash and 0.3521 of an NXP ordinary share for each Freescale common share held at the close of the transaction. Going forward, NXP predicts the joined companies will save $200 million in the first year, followed by “a clear path to $500 million of annual cost synergies.”
Richard Clemmer, CEO of NXP who will continue to be CEO of the merged company, said, “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.”
Analyst
On average, the top analyst consensus on TipRanks for NXP Semiconductor is Moderate Buy.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.