Monday, semiconductor products manufacturer STMicroelectronics NV (STM) and NXP announced the completion of a deal combining key wireless operations of both companies into ST-NXP Wireless.
The joint venture, ST-NXP Wireless, would start operations on August 2, 2008 and launches as a solid top-three industry player with a complete wireless product and technology portfolio and as a leading supplier to major handset manufacturers who together ship more than 80% of all handsets.
STMicroelectronics owned 80% of the joint venture and contributed $1.55 billion to NXP including a control premium. The new organization will start with a cash balance of about $350 million, in a very healthy financial position. Before the formation of the joint venture, both the businesses generated $3 billion in revenue in 2007.
ST-NXP Wireless would combine key design, sales and marketing and back-end manufacturing assets from both parent companies into a streamlined organization. The company is designed with low capital intensity, securing leading-edge wafer manufacturing capacity from both parent companies and foundries.
ST-NXP Wireless would be lead by Alain Dutheil as the company's chief executive officer. Dutheil currently serves as the chief operating officer of STMicroelectronics. The Executive Committee of ST-NXP Wireless also includes Abhijit Bhattacharya as CFO.
ST-NXP Wireless would be well positioned with all of the vital technologies for Universal Mobile Telecommunication System, for the emerging TD-SCDMA standard and other cellular, multimedia and connectivity capabilities to effectively serve its global customers with complete wireless and mobile solutions across the spectrum of applications.
Shares of STMicroelectronics closed Monday's regular trading session at $11.06, down 27 cents or 2.38% but gained 14 cents or 1.27% in the after hours trading.
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