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NXP sells RF Power unit to China firm

Posted: 01 Jun 2015     Print Version  Bookmark and Share

Keywords:RF Power  JAC Capital  merger 

In a bid to secure approval for its acquisition of Freescale Semiconductor Ltd, NXP Semiconductors N.V. announced the sale of its RF Power business to Chinese state-owned investment company Jianguang Asset Management Co. Ltd (JAC Capital) for $1.8 billion.

The NXP RF Power business is one of the market leaders in high performance RF power amplifiers primarily focused on the cellular base station market, but with potential future growth applications in the areas of industrial lighting, next generation cooking and automotive electronic ignition systems.

NXP's $11.8 billion deal with Freescale would result in the creation of the fourth biggest smart chip company in the world. The new company is said to be worth more than $30 million and is expected to improve NXP's position in the Internet of Things business, according to a Wall Street Journal report.

This wave of consolidation in the semiconductor industry continues with news last week that Avago Technologies Ltd would buy its rival, Broadcom Corp., for approximately $37 billion ($17 billion in cash and $20 billion in stock), paving the way for the world's sixth largest chip vendor.

"The creation of a new company focused on the RF power amplifier market is a ground breaking transaction for JAC Capital and a great deal for our customers. Although we would have expected a higher valuation in a regular disposal, JAC Capital's ability to support continued growth and development of the business and its ability to sign and close a transaction rapidly was a key factor in enabling the best outcome for our customers and shareholders, as well as supporting the closure of the merger with Freescale Semiconductor," said Richard Clemmer, NXP chief executive officer.

"We are happy to reach an agreement to acquire the RF Power business from NXP with its strong team and established technology. We will keep on increasing investment in R&D, manufacturing and customer service of the new company to strengthen its market position. JAC Capital and its shareholders will also help the new company to maintain fast and stable growth through our network of worldwide financial institutions, industrial leaders and JAC Capital's management team with many years of experience in the semiconductor and telecom industry," said Brighten Li, chairman of JAC Capital Investment Evaluation Committee.

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