Flextronics Adds a Key Part

The electronic manufacturing services outfit buys rival Solectron to bolster its position in a tough industry

If you can't beat 'em, merge 'em. In a tough industry with depressed stock prices, leading electronics manufacturing services (EMS) provider Flextronics International (FLEX) announced on June 4 it will acquire smaller competitor Solectron (SLR) in a $3.6 billion deal. Both companies design and make computers, networking gear, cell phones, and other products that technology companies sell. EMS players have been struggling with tepid capital spending on technology, as well as pricing pressures and stiff competition from Asian players (see BusinessWeek.com, 5/30/07, "EMS: Victims of Wait-and-See Spending").

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