Silicon Laboratories has announced a definitive agreement with NXP, formerly Philips Semiconductor, that it will purchase the Aero transceiver, AeroFONE single-chip phone and power amplifier product lines, for $285 million in cash, with additional earn-out potential of up to an aggregate of $65 million over the next three years.

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“This transaction transfers a one of a kind business in the mobile handset market to NXP, a company with the necessary scale and resources to effectively compete long term,” stated Necip Sayiner, president and chief executive officer of Silicon Labs. “By placing the business in the hands of those best able to capitalize on it, our stockholders are realizing a premium for the RF technology leadership we have created. Strategically, this will enable us to focus on the most profitable and highest growth segment of our business, our core mixed-signal products. With this transaction, Silicon Labs is transformed into a focused mixed-signal semiconductor company with major product initiatives in broadcast, VoIP, wireline and microcontroller applications. These businesses enjoy higher margins, exciting growth potential and more sustainable competitive advantages for the company. We believe this transaction will allow us to achieve our target operating model more quickly and provide a platform for acquisitions that are aligned with our core mixed-signal strategy.”

According to Frans van Houten, president and chief executive officer of NXP, “Silicon Labs has established leadership in RF CMOS technology and was the first to market with an innovative, truly single-chip phone. This innovative technology, combined with NXP's strengths in system solutions for 2G and 3G phones, will allow NXP to further strengthen our position in global mobile communications.”

The transaction, which is subject to regulatory review and other customary conditions, is expected to close by the end of the first quarter.

For more information, visit silabs.com and www.nxp.com.