- U.S. approvs sale of radio-frequency power-amplifier unit
- Path cleared for proposed $11 billion takeover of Freescale
NXP Semiconductors NV advanced after the chipmaker received U.S. approval for the sale of its radio-frequency power-amplifier unit to a Chinese joint venture partner, a condition for the company’s proposed $11 billion takeover of Freescale Semiconductor Ltd.
NXP, based in Eindhoven, the Netherlands, said Tuesday the sale of the power business to Jianguang Asset Management Co. Ltd. for $1.8 billion got the green light from the Committee on Foreign Investment in the United States, or CFIUS.
NXP traded 7 percent higher at $84.08 a share at 1 p.m. in New York. Freescale rose 6.3 percent to $35.76.
NXP agreed to buy Freescale in March to grow its market share in chips used in the automobile industry. Including Austin, Texas-based Freescale’s debt, the purchase price in cash and stock is about $15.9 billion. Semiconductor makers have pursued mergers at a record pace this year as the companies seek to get bigger to spread out costs and better compete.
The clearance for the sale of the RF Power business "drives the path open for NXP’s merger with Freescale,” Charles Bordes, an analyst for AlphaValue, said by phone from Paris.
CFIUS is an inter-agency committee headed by the U.S. Department of the Treasury with members from the justice, homeland security, commerce and defense departments. It reviews the effects of transactions on national security, according to its website.
Freescale’s biggest customer is Continental AG, the auto-parts maker based in Hanover, Germany, according to supply-chain data compiled by Bloomberg, while NXP’s customers include Apple Inc. and Samsung Electronics Co.