Friday brings news that ST and NXP will merge their wireless business. NXP is the semiconductor spin-off of Phillips. ST Micro is perhaps the only semiconductor company in Europe which still holds on to the IDM model.
While the announcement was touted as a formation of a new joint venture between the two companies; it looks like ST is actually buying NXP’s wireless business. Initially NXP will take 20% stake of the new joint venture; however the agreement also contains exit clauses on which NXP can choose to leave the joint venture in 3 years time. Furthermore, ST is actually paying NXP a sizable amount, $1.55 billion to be exact, in order to get 80% control of the new venture.
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