NXP, Freescale Merger Creates a $10 Billion Chipmaker
The merger will create a company that will rank ahead of such well-known names as Broadcom, Texas Instruments and AMD, with a market cap of $40 billion.Intel, Samsung, Qualcomm, Micron and a list of other companies now have a more powerful, reformed competitor in the semiconductor market. In a merger of two top-20 chip market leaders, Netherlands-based NXP Semiconductors on March 2 said it will acquire Freescale Semiconductor in a deal that would create a processor-making giant with combined revenue of more than $10 billion per year. Under the terms of the agreement, Freescale shareholders will receive $6.25 in cash and 35 percent of an NXP common share for each Freescale common share held. The purchase price implies a total equity value for Freescale of about $12 billion, the companies said. To put the semiconductor market changes into perspective, leader Intel has about 15 percent market share with about $50 billion per year in revenue. No. 2 Samsung has about 11 percent of the market at $35 billion.
The NXP-Freescale merger will create a top 10 company that will rank ahead of such well-known names as Broadcom, Texas Instruments, Advanced Micro Devices, Sony, Nvidia and STMicroelectronics. The market cap of the new company will amount to about $40 billion.