Feeds

STMicro and NXP tie-up in wireless joint venture

Together we stand (divided we fall)

Application security programs and practises

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. ®

HP ProLiant Gen8: Integrated lifecycle automation

More from The Register

next story
Google Nest, ARM, Samsung pull out Thread to strangle ZigBee
But there's a flaw in Google's IP-based IoT system
Orange spent weekend spamming customers with TXTs
Zero, not infinity, is the Magic Number customers want
Want to beat Verizon's slow Netflix? Get a VPN
Exec finds stream speed climbs when smuggled out
US freemium mobile network eyes up Europe
FreedomPop touts 'free' calls, texts and data
'Two-speed internet' storm turns FCC.gov into zero-speed website
Deadline for comments on net neutrality shake-up extended to Friday
GoTenna: How does this 'magic' work?
An ideal product if you believe the Earth is flat
NBN Co execs: No FTTN product until 2015
Faster? Not yet. Cheaper? No data
prev story

Whitepapers

Top three mobile application threats
Prevent sensitive data leakage over insecure channels or stolen mobile devices.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Mobile application security vulnerability report
The alarming realities regarding the sheer number of applications vulnerable to attack, and the most common and easily addressable vulnerability errors.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.