Two private equity consortiums are bidding to buy chip maker Freescale Semiconductor Inc.for about $16 billion, sources familiar with the matter said on Monday.
Freescale shares were trading up $5.69, or 18.5 percent, at $36.44 on the New York Stock Exchange after the news.
A group consisting of Kohlberg Kravis Roberts & Co. and Silver Lake Partners was the leading bidder for the company, according to two sources familiar with the matter.
The other bidding group includes Texas Pacific Group [TPG.UL], Blackstone Group [BG.UL], Permira [PERM.UL] and Carlyle Group [CYL.UL] , sources said.
Freescale, which was spun off from Motorola Inc. in 2004, makes chips used in cellphones, network equipment and automotives. Texas Pacific already has a stake in Freescale, which is based in Austin, Texas.
About 45 percent of Freescale's revenue comes from its automotive, industrial and consumer products unit and about 28 percent from its enterprise and telecom networking chip business. It has 24,000 employees in 30 countries.
The company is now the third-largest chipmaker in the United States with 2005 sales of $5.8 billion.
Source: Forbes & Reuters
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