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Dutch chipmaker NXP agrees to buy Freescale Semiconductor for $40b

Dutch chipmaker NXP agrees to buy Freescale Semiconductor for $40b

AMSTERDAM: Dutch chip maker NXP Semiconductors NV has agreed to buy smaller peer Freescale Semiconductor Ltd. and merge operations in a deal valuing at over $40 billion.

The deal, announced by the pair late on Sunday and first reported by Reuters, will make the business within the auto and industrial semiconductor markets.

The transaction is the clearest sign yet that semiconductor companies are regaining the confidence required to pursue big mergers and acquisitions at a time when their major clients, such as mobile phone manufacturers, seek to consolidate suppliers. Texas-based Freescale also has its chips in consumer products such as Amazon’s Kindle e-reader.

The deal is the fourth semiconductor sector M&A deal this year, and the biggest of these by far.

Last month, Avago Technologies said it would buy wireless networking company Emulex Corp. for more than $600 million, while MaxLinear said it would buy Entropic Communications Inc. for $287 million. In January, Lattice Semiconductor said it would buy Silicon Image for $600 million.