Dutch chip maker NXP Semiconductors has confirmed long standing rumours that it is to be acquired by Qualcomm.
Confirmation of the deal came after reports last month that NXP was in acquisition talks.
The deal see Qualcomm paying an eye watering $47bn in cash (£38.5bn) or $110.00 per NXP share. Before the deal was confirmed, NXP has a market value of about $28.5 billion (£22bn), while Qualcomm was approximately $93 billion (£72bn).
The acquisition has already been approved by both boards, and the combined company is expected to have “annual revenues of more than $30bn (£24.6bn), serviceable addressable markets of $138bn (£113bn) in 2020 and leadership positions across mobile, automotive, IoT, security, RF and networking.”
NXP Semiconductors is a Dutch firm that employs roughly 45,000 people in more than 35 countries around the world. It makes a range of chips including those used in contactless payment systems, and is considered to be a leading chip suppliers to the automotive industry.
It notably acquired Freescale Semiconductor last December, which bolstered its automotive credentials.
“By joining Qualcomm’s leading SoC capabilities and technology roadmap with NXP’s leading industry sales channels and positions in automotive, security and IoT, we will be even better positioned to empower customers and consumers to realize all the benefits of the intelligently connected world,” he added.
There was no word of possible restructuring or redundancies following the deal, but it is likely considering the deal comes amid a global slowdown in the mobile sector, and consolidation in the semiconductor industry.
“The combination of Qualcomm and NXP will bring together all technologies required to realise our vision of secure connections for the smarter world,” said NXP CEO Rick Clemmer. “Jointly we will be able to provide more complete solutions which will allow us to further enhance our leadership positions, and expand the already strong partnerships with our broad customer base, especially in automotive, consumer and industrial IoT and device level security.”
Qualcomm had until this point ignored the consolidation ongoing in the semiconductor industry. Intel for example acquired chip rival Altera for $16.7bn (£11bn) last year and Broadcom was sold to Avago for $37bn (£28bn).
Qualcomm of course makes most of its profits from its wireless patent portfolio that it licenses to the mobile industry, but the majority of its revenue comes from chip sales. Indeed, its silicon is found in numerous Android smartphones and Apple products.
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