STMicroelectronics and Intel have merged their flash memory businesses into a new company with anticipated annual revenues of $3.6bn.
The firms, along with California-based private equity firm Francisco Partners, have entered into a definitive agreement to create a new independent semiconductor company from the key assets of their flash businesses.
The new company will combine key flash memory research and development, manufacturing and sales and marketing assets of Intel and STMicroelectronics.
“The new company will be positioned to service customers with all of the elements necessary to deliver current and next-generation non-volatile memory technologies, while allowing ST to redefine its participation in flash memory,” said Carlo Bozotti, STMicroelectronics president and CEO, and non-executive chairman designate of the new company.
“The new memory company will have the people, scale and technology leadership to meet the needs of customers requiring leading-edge products in this highly competitive marketplace,” said Paul Otellini, Intel president and CEO.
Under the terms of the agreement, STMicroelectronics will sell its flash memory assets, including its NAND joint venture interest and other NOR resources, to the new company while Intel will sell its NOR assets and resources.
In exchange, Intel will receive a 45.1 per cent equity ownership stake and a $432m cash payment at close.
STMicroelectronics will receive a 48.6 per cent equity ownership stake and a $468m cash payment at close.