STM buys NXP's MEMS sensors for $950 million

"with a gross margin and operating margin both significantly

accretive to ST,' underlines the company's note, which adds: 'The acquisition is expected to have an accretive effect on ST's earnings per share from the completion of the transaction.

With this operation STM strengthens its position in an already well-preserved sector, which mainly develops safety products for automotive and sensors for industrial applications, offering opportunities for applications also in the field of consumer electronics. "The planned acquisition is an excellent strategic choice for ST," emphasises Marco Cassis, president of the analog, power & discrete, MEMS and sensors group of STMicroelectronics, precisely because of the complementarity of technologies and customer relationships.

"NXP is a leader in automotive MEMS-based pressure and motion sensors, with a

long history of strong customer adoption," explained Jens Hinrichsen, executive

vice-president and general manager of the analogue and automotive embedded systems division of the Dutch multinational - However, after a careful review of the portfolio, the company determined that the

business does not fit into the long-term strategic direction. We agreed with

STMicroelectronics that the product line will fit seamlessly into the portfolio, in the

manufacturing structure and in ST's strategic roadmap. We are pleased to have found

for the MEMS sensor team excellent accommodation and a long-term future at

ST'.

"MEMS technologies make it possible new advanced features for safety, electrification, automation and connected vehicles,laying the foundation for future revenue growth," explains STM, The growth of automotive MEMS inertial sensors is expected to outpace that of the general MEMS market.

The acquisition, once the required authorisations have been obtained, is expected to be finalised in the first half of next year.

According to Intermonte analysts' estimates, the acquisition, realised at an Ev/Ebit multiple of 10.6 versus STM's multiple of about 12, will increase earnings per share by about 3%, and up to 4-5% including possible synergies.