NXP and Freescale announce merger completion

7th December 2015

Joe Bush

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NXP Semiconductors and Freescale Semiconductor have announced the completion of the merger that was initially agreed in March 2015. The merger has created a mixed signal semiconductor industry company with combined revenue of over $10bn. The merged entity will continue operations as NXP Semiconductors and has become a market leader in automotive semiconductor solutions and in general purpose microcontroller (MCU) products.

“Through this merger we have created an industry powerhouse focused on the high growth opportunities in the Smarter World, capitalising on the emerging opportunities offered by the accelerating demand for connectivity, processing and security. Today’s formation of the new NXP is a transformative step on our journey to become the industry leader in high performance mixed signal solutions,” said Rick Clemmer, NXP Chief Executive Officer.

“This merger enables us to deliver more complete solutions to our customers as we are emerging as the leader in the Secure Connections – and the supporting infrastructure – for the Smarter World domain. As a result, we reiterate today that we fully expect to continue to significantly out-grow the overall market, drive world class profitability and generate even more cash, allowing us to continue creating significant value for NXP’s shareholders.”

As previously announced, the transaction is expected to be accretive to NXP non-GAAP earnings in 2016, and NXP anticipates achieving cost savings of $200m in 2016 with a clear path to $500m of annual cost synergies.

NXP has also announced the closing of the divestiture of its RF Power business to Jianguang Asset Management (JAC Capital), after receiving official confirmation that JAC Capital has deposited the required funds at its bank in China to pay the purchase price. The cash proceeds for the sale will be received later this month following the required regulatory filings for cross-border transfers of funds from China. NXP has obtained bridge financing until the funds are received.