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ST, NXP to merge wireless businesses

April 10, 2008 //

NXP and STMicroelectronics will combine their wireless operations to form a joint venture company. ST will own 80 percent; NXP gets 20 percent and $1.55 billion in cash from ST.

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LONDON NXP BV and STMicroelectronics NV will combine their wireless operations to form a joint venture company. ST will own 80 percent of the venture; NXP gets the other 20 percent along with $1.55 billion in cash from ST.

Nokia also endorsed the deal, saying the wireless supply chain needs consolidation.

The joint venture, which is set to have all major handset manufacturers as customers, will have greater economies of scale to better meet customer needs in 2G, 2.5G, 3G, multimedia, and future wireless technologies, ST said.

The venture will be created from businesses that together generated $3 billion in revenue in 2007 and will own thousands of communication and multimedia patents. It is set to be one of the top three semiconductor companies in the wireless industry rivalling Texas Instruments and Qualcomm Inc.

The jointventure is set to combine design, sales and marketing, and back-end manufacturing assets from both companies and use its parent companies and foundries for wafer fabrication services. The JV intends to address UMTS, TD-SCDMA, WiFi, Bluetooth, GPS, FM Radio, USB, and UWB standard. The JV will also integrate the Silicon Laboratories' wireless and GloNav's GPS operations recently acquired by NXP, ST said.

"The strength of this venture is its excellent relationships with key customers, as well as the complementary IP and product portfolios transferred from ST and NXP that create a rich and broad offering with the capability to deliver leading-edge innovations to the market," Carlo Bozotti, president and CEO of STMicroelectronics, said in a statement. "The JV's strong positioning leads us to expect immediate and future top- and bottom-line synergies for the exciting new enterprise and establishes a powerful foundation to build on its parents' 2G, 2.5G, 3G, multimedia and connectivity efforts. This combination will form the basis of the success of the new venture."

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