NXP, Freescale agree $40bn merger

2nd March 2015

Mick Elliott

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NXP Semiconductors and Freescale Semiconductor are to merge. The companies have entered into a definitive agreement under which NXP will merge with Freescale in a transaction which values the combined enterprise at just over $40bn. The merger creates a high performance mixed signal semiconductor industry leader, with combined revenue of greater than $10 billion.

The merged entity will become the market leader in automotive semiconductor solutions and the market leader in general purpose microcontroller (MCU) products. The combined company will capitalise on the growing opportunities created by the accelerating demand for security, connectivity and processing.

“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,” said Richard Clemmer, NXP Chief Executive Officer. Mr. Clemmer will continue to be the President and Chief Executive Officer of the merged company.

“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,” said Gregg Lowe, Freescale Semiconductor President and Chief Executive Officer.