STMicro to merge with NXP for creation of wireless joint venture

STMicroelectronics (NYSE: STM, Euronext: STM, BIT: STM), an electronics and semiconductor manufacturer, and NXP Semiconductors plan to combine their wireless assets to form a joint venture.

In order to head the joint venture, STMicro will pay NXP $1.55 billion to get an 80% stake. It’ll buy out the remaining 20% in three years.

NXP (for Next eXPerience) Semiconductors is the name for the new semiconductor company founded by Philips as announced by its CEO Frans van Houten to its customers and employees in Berlin on August 31, 2006 and to the global media the next day.

STMicroelectronics was formed in June 1987 by the merger of semiconductor companies Società Generale Semiconduttori Microelettronica (SGS Microelettronica) of Italy and Thomson Semiconducteurs, the semiconductor arm of France's Thomson. At the time of the merger the company was known as SGS-THOMSON but took its current name in May 1998 following the withdrawal of Thomson SA as an owner.

By 2008, STMicroelectronics was ranked fifth, behind Intel, Samsung, Texas Instruments and Toshiba, but ahead of Infineon, Renesas, NEC, NXP, and Freescale.

The deal will be closed in the third quarter, thus placing a powerful player on the wireless chip business market.