Private Equity Groups Buy Freescale

Former Motorola subsidiary, Freescale Semiconductor has agreed to be brought by a private equity consortium in a transaction with a total equity value of US$17.6 billion. The consortium is led by The Blackstone Group, and includes The Carlyle Group, Permira Funds and Texas Pacific Group.

Under the terms of the merger agreement, the consortium will acquire all of the outstanding Class A and Class B shares of Freescale for US$40 per share in cash, representing a premium of approximately 36% over Freescale's average closing share price during the 30 trading days ended September 8, 2006. The company first acknowledged it was in discussions with third parties regarding a possible transaction on September 11, 2006.

The board of directors of Freescale has unanimously approved the merger agreement.

Motorola spun-off Freescale in July 2004 with a stock marker floatation at US$13 per share. Other companies have two months to mount a counter bid for the company, although a hefty termination fee would have to be paid should a rival suitor win.

Large numbers of Freescale and Motorola employees hold shares in the company - and as is normal with this sort of deal - any stock options will be executed immediately, offering a nice windfall for the staff and executives."

Posted to the site on 18th September 2006