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NXP Acquires Freescale Sending Both Semiconductor Stocks Higher - Stocks in the News

Zacks Research Staff

NXP Semiconductors (NXPI), a Dutch chip maker, recently announced that it will be acquiring Freescale Semiconductor Holdings (FSL) for $12 billion.  After this merger happens, the beefed up NXP will become the largest supplier of microchips in the automotive industry.  CEO Rick Clemmer says the acquisition will form “a true powerhouse” in the semiconductor sector.  As a result of merging operations, NXP will become a $40 billion company in the semiconductor space.

Both stocks have proven to be winners over the last 52 weeks, as they have experienced tremendous stock price growth.  In the last year, NXP and FSL have surged 76.35% and 77.89%, respectively.  Stock performance today saw NXP shoot up 16.57%, with FSL climbing up 11.46% in the session.

NXP and Automotive Chips

NXP has been known for its automotive and chip identification business, but has seen massive growth in its portable device and computer business in the last year.  NXP wants to make sure that its primary revenue builder with building chips in the auto segment stays as competitive as possible.  Thus, this acquisition with a fellow peer for making automotive chips should do the company well with regards to accomplishing that goal.

FSL holds a Zacks Rank #1 (Strong Buy).  The company’s shareholders will receive $6.25 in cash and 0.3521 of an NXP ordinary share for each FSL common share held at the close of the transaction.

NXP is also a Zacks Rank #1 (Strong Buy).  The company experiences volatility, as it has a beta of 2.82.  NXP has surprised in three of the last four quarters.  It also helps that all estimate revisions in the past 90 days have been revised up unanimously. 

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NUVEEN SL TFIP (NXP): ETF Research Reports
FREESCALE SEMI (FSL): Free Stock Analysis Report
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