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Freescale Accepts $17.6-Billion Deal

September 16, 2006|From the Associated Press

DALLAS — Freescale Semiconductor Inc., a maker of cell-phone chips that was spun off by Motorola Inc., said Friday that it had agreed to be purchased by a private-equity consortium for $17.6 billion.

The price of $40 a share represents a 7.6% premium over Austin, Texas-based Freescale's closing share price of $37.16. The shares were trading at $39.42 in the after-hours session Friday after the deal was announced.

The shares surged more than 20% on Monday, when the company acknowledged it was in discussions about a deal.

The company's board has unanimously approved the transaction.

Freescale spokesman Tim Doke said the acquisition would be filed with the Securities and Exchange Commission on Monday. Until then, he said, the company could not comment further.

The consortium is led by Blackstone Group and includes Carlyle Group, Permira Advisors and Texas Pacific Group.

The agreement includes a provision under which the semiconductor maker may solicit alternative bids from third parties for the next 50 days.

The former Motorola unit became a publicly traded company in July 2004. It generated about $5.8 billion in sales in 2005 and has 24,000 employees worldwide, including 5,400 in Austin. Freescale still counts its former parent company among its largest customers.

Along with IBM Corp., Free- scale used to supply Apple Computer Inc. with PowerPC microprocessors until last year, when Apple switched to chips from Intel Corp.

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