PARIS The European Commission announced Wednesday (Nov. 26) it has authorized, under the European Union merger regulation, the creation of a joint venture between EMP, the wireless platform business of Ericsson, and ST-NXP, the wireless semiconductors business of STMicroelectronics.
Following a market investigation, the Commission concluded that the joint venture would not "give rise to competition concerns in the markets for wireless platforms and wireless semiconductors" in the European Economic Area (EEA) or any substantial part of it.
In August, ST and Ericsson agreed to merge ST-NXP Wireless and Ericsson Mobile Platforms (EMP) and into a 50/50 joint venture.
Under the terms of the transaction, Ericsson's contribution represents $1.1 billion in cash. This will be used to pay $700 million to ST in exchange for ST-NX, and to provide a cash buffer of $400 million for the new venture. ST is expected to exercise its option to buy NXP's 20-percent stake in ST-NXP Wireless before the closing of the transaction.
The fabless joint venture is set to employ about 8,000 people and have estimated annual revenue of $3.7 billion.