EC green-lights NXP/Freescale deal

EC green-lights NXP/Freescale deal

18 SEP 2015

The European Commission approved the acquisition of semiconductor maker Freescale by NXP – with conditions.

In a statement, the regulator said that NXP must divest its radio frequency power business, because a combination with Freescale “could have led to higher prices and less competition”.

RF power transceivers make radio signals more powerful and, the Commission said, “are predominantly used in base stations for mobile telecommunications (3G, 4G, LTE), as well as in radio and television broadcasting, microwave ovens, mobile radios and air traffic control equipment”.

Freescale and NXP are the sector’s two largest players and close competitors, particularly in the base station market, the merger investigation found.

NXP has offered to sell its RF power business, including assets and personnel, but excluding assets related to front-end manufacturing. It is also offering an agreement with a third-party foundry to perform front-end manufacturing, and to provide transitional manufacturing and service agreements.

This “will allow the purchaser of the divested business to replicate NXP’s previous role in the RF power transistors market thereby maintaining effective competition”.

NXP and Freescale announced a merger in March 2015, in a deal which will create a business valued at around $40 billion. It was said that the combined company “will capitalise on the growing opportunities created by the accelerating demand for security, connectivity and processing”.

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Steve Costello

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