LONDON A consortium of investment firms is close to finalizing a deal to buy Freescale Semiconductor Inc. for about $16 billion, according to a New York Times report published Monday (Sept. 11).
Freescale, a vendor of chips for communications and automotive applications, was spun off from Motorola Inc. in 2004. The possibility of a deal to combine Freescale with the recently formed NXP is also in the background although this is thought unlikely to happen, according to the report.
The consortium in talks to acquire Freescale includes Texas Pacific Group, Blackstone Group and Permira, with the possibility that the Carlyle Group and Bain Capital could also join the group, the report said referencing unnamed individuals briefed on the negotiations as its sources.
The report went on to say that a second consortium comprising Kohlberg Kravis Roberts & Company and Silver Lake Partners had also submitted an offer for Freescale, but that the alternative bid looked unlikely to succeed because it may have been too little and too late.
KKR and Silver Lake Partners are part of a consortium that is acquiring an 80.1 percent stake in NXP Semiconductors, formerly the semiconductor division of Royal Philips Electronics, for 3.4 billion euros (about $4.4 billion). As Freescale and NXP conduct advanced process research together in Europe and both lie just outside the top ten of global semiconductor companies there is scope for KKR and Silver Lake to combine NXP and Freescale to form a top 5 company.