Dutch NXP Semiconductors is to buy Freescale Semiconductor and merge operations in a deal valuing the combined company at over $40 billion. The deal will make the business the industry leader within the auto and industrial semiconductor markets.
This is the fourth semiconductor sector M&A deal this year, and the biggest by far. Freescale shareholders will receive $6.25 in cash and 0.3521 of an NXP share for each Freescale share. The purchase price puts Freescale’s value at $11.8 billion, with a total enterprise value of $16.7 billion including debt. Freescale shareholders will own about 32 per cent of the combined company.
NXP, once part of Philips, has operations in more than 25 countries and had revenue of $5.7 billion in 2014. Texas-based Freescale, once part of Texas Instruments, also has operations in more than 25 countries and had net sales of $4.6 billion in 2014.
NXP’s portable device and computer business is growing quickly, with its revenue up 46 per cent year-on-year to $712 million in 2014.