Kohlberg, Silver Lake to Acquire Semiconductor Unit of Philips

Kohlberg Kravis Roberts and Silver Lake Partners appears close to a deal to acquire the semiconductor division of Philips Electronics. According to the New York Times, the two companies will pay more than $10.2 billion for the semiconductor unit.

Philips Electronics has a market share of 2.5% and is ranked eighth in the semiconductor makers industry. However, sales in the semiconductor unit only grew 4.7% in 2005 while the industry grew 5.7%. The unit makes chips used in cellphones, music players, small appliances and automotive parts.

Analysts had expected a price between $7 billion to $9 billion. According to Gartner, the business unit only had $6 billion in revenue in 2005. The deal has not been finalized and could still fall apart or another group could come in with a higher offer.

Source: New York Times