SAN FRANCISCO Europe's largest chip maker, STMicroelectrnics NV, could be the next target of private equity following the leveraged buyout of Philips Electronics' chip unit and the pending acquisition by a private equity consortium of Freescale Semiconductor Inc., according to a Bloomberg report, which cites a Sept. 26 report by Merrill Lynch & Co. analysts.
In recent years, private equity firms have scooped up several small and medium-sized chip companies. But Freescale's pending $17.6 billion acquisition by a consortium led by the Blackstone Group, coming on the heels of Philips' $10.6 billion-spinout of its chip unit to private equity as NXP, may have signaled a new era of private equity in the semiconductor industryone where sizeable companies may well be targets.
According to the Bloomberg story, the Merrill Lynch analysts who authored the report have no evidence that a leveraged buyout of STMicro is in the works, but that it seemed rational to expect a buyout offer, based on financial statistics and the current investment climate.
The Bloomberg story quotes other analysts, who offer no insight into a looming deal, but suggest that it would make sense.