NXP, Freescale Announce Mega Merger

In one of the biggest consolidations in the semiconductor industry to date, NXP and Freescale have announced plans for a merger. If the deal is approved, they would create a top-10 chip maker and embedded processor giant with more than $10 billion in combined revenues.

The $40 billion deal would make the two companies the world's ninth largest chip maker. It would leapfrog competitors STMicroelectronics and Renesas at $7 billion each and approach Texas Instruments at $12 billion, according to figures from IC Insights.

MORE FROM DESIGN NEWS: Dassault Expands Portfolio With Biovia

As our sister site, EETimes, reports, the deal comes at a time of rapid consolidation as the semiconductor industry generally lumbers to single-digit growth rates. For its part, Freescale still carries significant debt but returned to profitability last year as it struggles toward a goal of 50% gross margins.

Richard Clemmer, NXP's chief executive and proposed CEO of the combined company, called the merged company "a leader in high performance mixed signal solutions...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," he said in a press statement.

The transaction has been unanimously approved by the boards of directors of both companies and is subject to regulatory approvals, as well as the approval of NXP and Freescale shareholders.

Get more info on this mega merger at our sister site, EETimes.