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Sunday October 20, 2019

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FTC Approves NXP's Acquisition of Freescale, Requires NXP to Divest Radio Frequency Power Assets

Nov 26, 2015 01:28 AM EST | By Jean-Claude Arnobit
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Federal Trade Commission, approval, NXP Semiconductor N.V., Freescale Semiconductor Ltd., acquisition
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FTC Approves NXP's Acquisition of Freescale, Requires NXP to Divest Radio Frequency Power Assets
(Photo : Justin Sullivan | Getty Images News)

The Federal Trade Commission (FTC) has approved the NXP Semiconductor N.V.'s proposed acquisition of Freescale Semiconductor Ltd. for $11.8 billion, according to a press release issued by the FTC.

The approval, though, comes with a condition that NXP will divest its radio frequency power assets.

The FTC said in the press release that according to the complaint, the proposed merger of NXP and Freescale would substantially lessen the competition in the radio frequency amplifier market worldwide without a divestiture.

The proposed merger would likely result in higher prices and reduce innovation.

The FTC adds in the press release that the complaint said that the worldwide market for radio frequency amplifiers and the semiconductor that amplifies radio signals is extremely concentrated.

NXP and Freescale provide more than 60 percent of the market's supply with Infineon Technologies AG the only other significant competitor.

Reuters said that the proposed NXP and Freescale merger was approved by the European Union (EU) antitrust regulators on September.

The EU regulators required the same condition for the proposed merger.

The FTC said in the press release that Jianguang Asset Management Co. Ltd., a Chinese private equity firm, will acquire NXP's radio frequency power amplifier assets.

NXP will be selling all its assets that are used primarily for manufacturing, research, and development of radio frequency power amplifiers.

The FTC adds in the press release that assets to be sold include a manufacturing facility in the Philippines, a building in Netherlands, all of NXP's patents and technologies used for the radio frequency amplifier business, and a royalty-free license to use NXP's other patents and technologies required by the business.

The divestiture also includes all of NXP's radio frequency power amplifier employees and managers.

Reuters adds that the merger of NXP and Freescale will value the combined company at more than $40 billion.

It will also create the biggest player in the industrial semiconductor markets.

Reuters adds that the shareholders of both companies approved the proposed merger in July.

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