A definitive agreement reached between NXP Semiconductors and Freescale Semiconductor will merge the two companies—an enterprise valued at over $40 billion. The newly combined company will look to become a leader in automotive semiconductor solutions and general-purpose microcontroller (MCU) solutions, capitalizing on opportunities created by the demand for security, connectivity, and processing.
The transaction was unanimously approved by the boards of directors for both companies, and is now subject to regulatory approvals and customary closing conditions. NXP will fund the transaction with $1.0 billion from its balance sheet, $1.0 billion of new debt, and approximately 115 million NXP ordinary shares. Following the transaction, Freescale shareholders will own approximately 32% of the joint company. The deal is expected to close in the second half of 2015.