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STMicroelectronics
and NXP Semiconductors’ joint venture operation, ST-NXP Wireless, is
set for a change. It is expected that STMicro will buy out the 20%
stake held by NXP in the joint venture to enable it to merge the
company with Ericsson Mobile Platforms in a new 50/50 fabless joint
venture.
The new merger will see both STMicroelectronics and Ericsson contribute their respective technologies to form a strong product offering for the semiconductor and mobile platform industries. It will see close to 8,000 people employed – 5,000 from ST-NXP Wireless and 3,000 from Ericsson - generating pro-forma 2007 sales of US$3.6 billion, according to the companies.
NXP’s CEO Frans van Houten said: "We understand the desire of ST to call our 20 percent stake in order to expand the ST-NXP Wireless joint venture with Ericsson. We support this next step that Ericsson and ST are taking to create the global leader in wireless semiconductors. To help ensure the success of the joint venture going forward all NXP's supply and support agreements will continue as planned. The additional proceeds of the 20 percent stake will enable NXP to further build leadership positions through innovation and investment in NXP's core businesses."
The joint venture will be led by a development and marketing company with approximately 7,000 employees, consolidated by ST, while Ericsson will account for it via equity. The companies will also set up a separate platform design company of approximately 1,000 employees to provide platform designs to the development and marketing company. Ericsson will consolidate this company and ST will account for it using the equity method.
Headquartered in Geneva, each company will appoint four directors to the board. Ericsson will designate Carl-Henric Svanberg as the Chairman of the Board and will choose the Executive Vice President, while ST will appoint Carlo Bozotti as the Vice Chairman and designate the CEO. Alan Dutheil (pictured), current CEO of the ST-NXP Wireless company, will lead the integration management team.