Philips semicon group bids on $18bn Freescale deal

Freescale Semiconductor, based in Austin, Texas, saw its share price rocket 18 percent today following its confirmation that it is ‘in discussions’ over a possible deal. Two rival private equity groups are reportedly bidding for the company, including the same consortium that recently acquired the semiconductor unit of Philips.

Freescale Semiconductor today confirmed reports that the Austin, Texas-based company is “in discussions” over a potential deal.

The company’s shares soared more than 18 percent today, giving the semiconductor maker a more than $18 billion (€14 billion) market capitalisation.

According to a report in the New York Times, two private equity groups are competing to sponsor Freescale’s going-private transaction. On one side is a group including Texas Pacific Group, The Blackstone Group, Permira and The Carlyle Group.

According to a source, the other bidding group is a consortium including Kohlberg Kravis Roberts, Bain Capital, Apax Partners, Silver Lake Partners and AlpInvest, who want to merge Freescale with the semiconductor unit the consortium recently bought out of Philips Electronics.

Freescale designs and manufactures embedded semiconductors used in automotive, consumer, wireless and networking products. The company had 2005 sales of $5.8 billion. Its share price has steadily risen since going public in 2004.

The company noted that “[t]here can be no assurances that any transaction will result from these discussions”.