EINDHOVEN, The Netherlands—Dutch chipmaker NXP Semiconductors N.V. has agreed to buy its smaller rival Freescale Semiconductor Ltd. for $11.8 billion
The deal makes NXP the biggest supplier of microchips to the automotive industry.
The deal pays Freescale shareholders only a small premium. Freescale’s market value was $11.1 billion based on the February 27 closing price.
NXP will assume Freescale’s debt, pushing the total value of the deal to $16.7 billion.
Freescale is based in Austin, Texas. It’s a former division of Motorola and makes microprocessors and microcontrollers for cars and industrial equipment.
The deal has been approved by the companies’ boards. It’s expected to close in the second half of the year if shareholders and regulators sign off.