NXP Sells Biz Unit to China

Author: EIS Release Date: Jul 12, 2016

NXP Semiconductor NV (Eindhoven, The Netherlands) has agreed to sell its standard products business unit to a Chinese consortium. This will involve the transfer of about one quarter of NXP's total workforce that is responsible for about one-fifth of NXP revenues.

The consortium – Beijing Jianguang Asset Management Co. Ltd. (JAC Capital) and Wise Road Capital Ltd. – has agreed to pay approximately $2.75 billion for the business. The consortium has also promised to honor the existing labor conditions of a workforce that will be forming a new company to be branded Nexperia and headquartered in Nijmegen, The Netherlands. The transaction is expected to close in the first quarter of 2017, pending all required regulatory approvals and employee representative consultations.

NXP's standard products business is supplier of discrete semiconductors, simple logic parts and power MOSFETs and had annual sales in fiscal 2015 of about $1.2 billion or about one-fifth of NXP's total sales for the fiscal year.

Under the terms of the deal the entire business unit will transfer to Nexperia including the management team led by Frans Scheper and 11,000 NXP employees. This is approximately one quarter of the work force.

The transfer will also include front-end wafer fabs in Hazel Grove, Manchester, UK and Hamburg, Germany and back-end facilities in Guangdong, China, Seremban, Malaysia, and Cabuyao, Philippines; in-house equipment manufacturer ITEC and all relevant patents and intellectual property associated with the standard products business.

NXP has worked with JAC Capital before and sold its RF power business to JAC Capital for $1.8 billion in December 2015.
"We believe the creation of Nexperia benefits our customers, as JAC Capital and Wise Road Capital will focus on global investments to enhance and support the future growth of the business," said Rick Clemmer, CEO of NXP, in a statement.

"Additionally, we will continue to support the existing labor conditions for the Standard Product employees, as they are a critical component to the long term success of the business,” said Brighten Li, chairman of JAC Capital investment evaluation committee, in the same statement.

Michael Zhang, managing partner of Wise Road Capital, said Nexperia would increasingly focus on automotive applications. The transaction is subject to review and approval by the US Federal Trade Commission, the European Commission, MOFCOM and other agencies.


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