Santa Clara, Calif. - Chipmakers Intel and STMicroelectronics, along with private equity firm Francisco Partners, on Tuesday announced plans to create a new independent semiconductor company that will focus on flash memory for cell phones, MP3 players, digital cameras and other consumer electronics.

Under the deal, Intel and STMicroelectronics will sell their flash memory-related assets to the new company, with Intel receiving a 45.1% stake and $432 million cash payment, and STMicroelectronics receiving a 48.6% stake and $468 million cash payment at closing.

The companies' respective businesses last year generated approximately $3.6 billion in combined annual revenue.

Francisco Partners will invest $150 million in the new company, and receive a 6.3% stake.

The new company has also arranged a $1.3 billion term loan and $250 million revolving loan from a consortium of banks.

The deal is expected to close in the second half of 2007.

The new company will be headquartered in Switzerland, incorporated in the Netherlands, and managed by Brian Harrison as CEO-designate and Mario Licciardello, currently corporate vice president of ST's Flash Memories Group, as COO-designate.

Related Links:
http://biz.yahoo.com/prnews/070522/nytu089.html?.v=89

http://biz.yahoo.com/ap/070522/intel_stmicroelectronics.html (AP)

http://www.intel.com

http://www.st.com

http://www.franciscopartners.com