PE firms to bid a reported $10bn on Philips semiconductor division

Three teams of private equity firms are in the final stages of bidding for the semiconductor division of Philips Electronics - a deal which could be valued at more than $10bn, according to news reports.

Philips Electronics will reportedly soon consider bids from three teams of private equity firms for the sale of its semiconductor unit, one of the largest chipmakers in the industry. Its sale could bring in more than $10 billion (€7.9 billion), according to a report in the Wall Street Journal.

The Dutch electronics giant had said in June that it was that it would pursue an initial public offering of shares of the unit, as well as a potential majority sale to private investors – a $10 billion sale. If such a sale goes through, it would be one of the largest private equity deals in the history of the technology industry, following the acquisition of SunGard Data Systems last year for $11.3 billion. Final bids are reportedly due to Philips by July 27.

The competing bidders include Kohlberg Kravis Roberts, teaming with Silver Lake Partners; Bain Capital with Francisco Partners and Apax Partners Worldwide; and Permira Advisors in conjunction with Texas Pacific Group and Blackstone Group, according to the Journal.

KKR and Silver Lake last year jointly acquired Agilent’s semiconductor products group in a deal valued at $2.66 billion, creating the largest privately held independent semiconductor firm at that time.

Philips ranked as the world’s ninth largest semiconductor maker last year, reporting chip sales of $5.84 billion.