Feeds

STMicro and NXP tie-up in wireless joint venture

Together we stand (divided we fall)

Boost IT visibility and business value

STMicroelectronics NV plans to merge its wireless semiconductor business with rival NXP to create the world’s third largest wireless chip company.

The joint venture will have about $3bn in combined revenues and some 9,000 staff under one organisation.

STMicro will take the lion’s share in the joint venture with an 80 per cent stake. The firm said in a statement that it will pay NXP $1.55bn including a control premium.

It has also built in a put and call option for NXP to withdraw its 20 per cent stake in three years’ time. STMicro will fund the deal from its own cash reserves.

STMicro president and chief exec Carlo Bozotti said: “The new company will be a solid top-three industry player and among the few companies with the scale and expertise to pursue the R&D investments necessary to establish itself as a leading player in the wireless and mobile-multimedia market.”

The two firms, which combined boost research and development budgets of about $400m a year, supply the likes of mobile giants Nokia, Samsung and Sony Ericsson with wireless chips.

Bringing both together under one roof will be seen by many as a move to consolidate costs in the face of concerns about a slowdown in customer spending and a looming recession.

NXP president and CEO Frans van Houten said: “It is increasingly apparent that the most successful companies in this space are the largest ones.”

STMicro and NXP, which was spun out of electronics giant Philips 18 months ago, hope to reel in more than $250m in annual cost synergies from the joint venture by 2011.

The deal is expected to close in the third quarter of this year subject to the usual regulatory requirements.

Earlier this month STMicro completed the merger of its cash-starved flash memory units with chip giant Intel creating a new company called Numonyx.

The two firms had been forced to delay closing the deal, originally due to complete at the end of December, because of "significant turmoil" in the financial markets. ®

Secure remote control for conventional and virtual desktops

More from The Register

next story
Déjà vu: Virgin Media jacks up broadband prices
Screw copper phone lines, we're UNIQUE, bleats telco
UK fuzz want PINCODES on ALL mobile phones
Met Police calls for mandatory passwords on all new mobes
Netflix swallows yet another bitter pill, inks peering deal with TWC
Net neutrality crusader once again pays up for priority access
Fifteen zero days found in hacker router comp romp
Four routers rooted in SOHOpelessly Broken challenge
New Sprint CEO says he will lower axe on staff – but prices come first
'Very disruptive' new rates to be revealed next week
US TV stations bowl sueball directly at FCC's spectrum mega-sale
Broadcasters upset about coverage and cost as they shift up and down the dials
UK mobile coverage is BETTER than EVER, networks tell Ofcom
Regulator swallows this line and parrots it back out at us. What are they playing at?
What's the nature of your emergency, Vodafone?
Oh, you've dialled the wrong number for ad fibs, rules ASA
EE network whacked by 'PDP authentication failure' blunder
Carrier is 'aware' of cockup, working on a fix NOW
ROAD TRIP! An FCC road trip – Leahy demands net neutrality debate across US
You crashed watchdog's site, now time to crash its ears
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 10 endpoint backup mistakes
Avoid the ten endpoint backup mistakes to ensure that your critical corporate data is protected and end user productivity is improved.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Rethinking backup and recovery in the modern data center
Combining intelligence, operational analytics, and automation to enable efficient, data-driven IT organizations using the HP ABR approach.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.