WASHINGTON–Freescale Semiconductor Inc. confirmed last week it is talking with parties relating to a possible transaction characterized by a New York Times story as a bidding war between two private equity firms to acquire the chipmaker for $16 billion.
The Times, citing sources involved in negotiations, said a consortium comprised of the Texas Pacific Group, the Blackstone Group, Permira and the Carlyle Group was close to picking up Freescale yesterday, but was outmaneuvered and outspent by a rival group including Kohlberg Kravis Roberts and Silver Lake Partners.
The report said the K.K.R.-Silver Lake group is contemplating merging Freescale, which was spun off from Motorola Inc. as part of a major reorganization in 2004, with the semiconductor unit of Philips Electronics.
Freescale, the third largest chipmaker in the United States and the ninth largest worldwide, said it had $5.8 billion in sales last year. The Austin-based firm supplies Motorola with GSM chips, with its specialized imbedded chips also supporting digital video broadcast, wireless local area networks and ultra-wideband gear. Freescale, a member of the S&P 500, also builds chips for Cisco Systems Inc. routers and for products in the automotive, industrial and consumer sectors. RCR
