No Fab Closures Planned, Say Freescale Suitors
An equity consortium led by The Blackstone Group says that if its plan to acquire Freescale Semiconductor goes ahead, it does not expect to close any wafer facilities.
The Texas-based chip manufacturer, which was spun-out of Motorola back in 2004, is the subject of a $17.6 billion all-cash takeover bid by Blackstone, The Carlyle Group, Permira Funds and Texas Pacific Group.
Rated as the world's ninth-biggest semiconductor manufacturer, Freescale runs a 150 mm GaAs wafer foundry in Tempe, AZ, for RF applications, and has been working on pioneering GaAs MOSFET technology that could blur the traditional boundaries between GaAs and silicon CMOS processing (see related story).
Aside from a new board of directors, the equity group says that there will be no major changes to either the organizational structure of the company, its product lines, or its leadership structure.
However, it did not offer any guarantees regarding potential layoffs, instead saying that "the consortium is investing in Freescale for growth".
Blackstone's offer of $40 per share represents a significant (36 per cent) premium over Freescale's value on the open market prior to the announcement of the takeover bid.
The proposed deal, which is expected to close no later than the first quarter of 2007, is just the latest in a series of private equity takeovers in the semiconductor business.
In late 2005, a consortium led by Silver Lake Partners and Kohlberg Kravis Roberts (KKR) acquired Avago Technologies, the chip manufacturing division that previously belonged to Agilent.
In addition, KKR and Silver Lake own a large stake in NXP - previously known as Philips Semiconductor before the Dutch company divested its chipmaking unit - and the same two companies have also been linked with a rival bid for Freescale.
Freescale is allowed to seek alternative proposals from third parties not involving the Blackstone consortium through November 3, although if it decides to accept a better offer, it would be obliged to pay a break-up fee.