Qualcomm has announced its intent to acquire Dutch semiconductor provider NXP for a total value of $47 billion (£38.4bn).
The merger is expected to have annual revenues of more than $30bn, serviceable addressable markets of $138bn in 2020 and leadership positions across mobile, automotive, IoT, security, RF and networking.
Qualcomm says the transaction utilises its strong balance sheet and will be efficiently financed with offshore cash and new debt. The transaction structure allows tax efficient use of offshore cash flow and enables Qualcomm to reduce leverage rapidly.
Steve Mollenkopf, CEO of Qualcomm Incorporated, said in a statement: “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 realise all the benefits of the intelligently connected world.”
Rick Clemmer, NXP chief executive, added: “United in a common strategy, the complementary nature of our technologies and the scale of our portfolios will give us the ability to drive an accelerated level of innovation and value for the whole ecosystem. Such a strong fit will bring opportunities for our employees and customers, as well as provide immediate attractive value for our shareholders, in creating the semiconductor industry powerhouse.”
Writing in The Motley Fool earlier this week, Anders Bylund noted that all told, NXP’s shares had gained 21% since the first initial reports of Qualcomm’s interest and that the two company’s visions “do make sense together, driving at essentially the same end target.”
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