Qualcomm to acquire NXP Semiconductors for $47 billion

qualcomm-nxp-mergerQualcomm announced it will acquire NXP Semiconductors through the purchase of all of the issued and outstanding common shares of NXP for $110.00 per share in cash.

Total enterprise value of the deal would be approximately $47 billion, the company said.

A subsidiary of Qualcomm will commence a tender offer soon. Qualcomm intends to fund the transaction with cash on hand and new debt.

The combined company is expected to have annual revenues of more than $30 billion, serviceable addressable markets of $138 billion in 2020.

NXP specializes in mixed-signal semiconductor electronics and focuses on sectors like automotive, broad-based microcontrollers, secure identification, network processing and RF power.  It has developed turnkey solutions for automotive infotainment, networking and safety systems.  NXP serves more than 25,000 customers across the globe.

“The NXP acquisition accelerates our strategy to extend our leading mobile technology into robust new opportunities, where we will be well positioned to lead by delivering integrated semiconductor solutions at scale,” said Steve Mollenkopf, CEO of Qualcomm.

“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,” Mollenkopf added.

The combination will result in complementary technology leadership in strategically important areas: general purpose and automotive grade processing, security, automotive safety sensors and RF; enabling more complete system solutions.

In mobile segment, the company will focus on SoCs, 3G/4G modems and security.

The combination of Qualcomm’s and NXP’s deep customer and ecosystem relationships and distribution channels enables the ability to deliver leading products and platforms at scale in mobile, automotive, IoT, industrial, security and networking.

Qualcomm expects to generate $500 million of annualized run-rate cost synergies within two years after the transaction closes.

“The combination of Qualcomm and NXP will bring together all technologies required to realize our vision of secure connections for the smarter world, combining advanced computing and ubiquitous connectivity with security and high performance mixed-signal solutions including microcontrollers,” said Rick Clemmer, NXP chief executive officer.

“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,” Clemmer added.

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