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NXP-Freescale merger nears completion

Posted: 02 Oct 2015     Print Version  Bookmark and Share

Keywords:acquisition  semiconductor company  automotive  Internet of Things  IoT 

While waiting for regulatory approvals in China and in the United States, the pending acquisition of Freescale by NXP remains "on track," according to Steve Wainwright, general manager of EMEA (Europe, the Middle East and Africa), vice president, sales and marketing at Freescale Semiconductor.

Speaking with EE Times at Freescale's event "Designing with Freescale," Wainwright was upbeat about the opportunity for the merged entity. NXP will become the world's fourth largest non-memory semiconductor company, after Intel, Texas Instruments and Broadcom; and will become the world's biggest automotive semiconductor supplier.

Last month, the European Commission approved NXP's acquisition of Freescale, subject to the divestment of NXP's radio frequency power business.

Steve Wainwright

Wainwright: Both companies are financially healthy.

Wainwright said NXP and Freescale expect to hear from the Ministry of Commerce People's Republic of China (MOFCOM) and the Federal Trade Commission (FTC) of the United States soon—most likely "in November."

"We said, at the time of the [M&A] announcement, this will get done in the fourth quarter. That hasn't changed. But of course, you know Rick Clemmer [NXP's CEO]. I'm sure he would have liked to see it happen in September."

Freescale's Wainwright has been appointed as NXP's general manager responsible for EMEA, once the merger goes through.

IoT and security

Wainwright believes automotive and the Internet of Things (IoT) will bring significant opportunities to the merged entity. At Thursday's "Designing with Freescale" event in Paris where more than 80 demos were presented, he cautioned, "What can derail IoT is security."

Referring to data in the United States, where 70 per cent of connected devices have no password-protected connectivity, he said Freescale is positioned and well-prepared to help IoT start-up companies with security. "We offer trusted architecture to end node, gateway and cloud" complete with cryptographic security protocols.

Freescale also runs "Freescale Security Labs" in two U.S. locations, Romania and China. Its goal is to drive security standards and solve customers' security issues.

Freescale slide show

By 2020, 4.6 billion own a toothbrush; 7.3 billion use a cell phone, tablet or PC; 24 billion unmanned Internet devices. (Source: Freescale's slide shown in Paris by Steve Wainwright)

Compatible with NXP?

Prior to the completion of the merger, NXP and Freescale aren't legally allowed to share financial details of their businesses. Visiting their customers together is also prohibited, according to Wainwright.

He said, "But the nice thing is that we do share a lot of the same customers, and yet, our businesses have very little overlap."

Most acquisitions usually involve one dominant company that integrates a smaller and lesser firm. But for NXP and Freescale, it's a merger of equals. Wainwright said, "We are roughly about the same size—$5 billion each in revenue."

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