By Lisa Kerner
Charlotte, N.C., June 4 - Flextronics International Ltd. entered into a definitive agreement to acquire Solectron Corp. in a transaction worth an estimated $3.6 billion.
Solectron shareholders can elect to receive either 0.345 of a Flextronics share or a cash payment of $3.89 per share. The shareholders will own 20% to 26% of Flextronics' outstanding shares.
Both companies' boards of directors approved the transaction, which is expected to close by the end of 2007, pending shareholder approval.
While Flextronics will continue to evaluate alternative long-term financing arrangements, Citigroup Global Markets Inc. has committed to provide a $2.5 billion seven-year senior unsecured term loan to fund the cash requirements for the transaction, including the refinancing of Solectron's debt, if necessary.
The combined company will operate in 35 countries, with a combined workforce of some 200,000 employees and annual revenues of more than $30 billion, a company news release stated.
"By joining forces, we expect the increased scale will enable us to further extend our market segment reach and leverage an increased vertical integration opportunity, realize significant cost savings, and better serve the needs of our combined customers, employees and shareholders," Flextronics chief executive officer Mike McNamara said in the release.
"We will be a larger, more competitive company and therefore better positioned to deliver supply chain solutions that fulfill our customers' increasingly complex requirements."
Citigroup Global Markets Inc. and Curtis, Mallet-Prevost, Colt & Mosle LLP advised Flextronics. Solectron was advised by Goldman, Sachs & Co. and Wilson Sonsini Goodrich & Rosati.
Flextronics is an electronics manufacturing services provider based in Singapore.
Located in Milpitas, Calif., Solectron offers collaborative design and new product introduction, supply chain management, lean manufacturing and aftermarket services.
| Acquirer: | Flextronics International Ltd.
|
| Target: | Solectron Corp.
|
| Price per share: | Either 0.345 of a Flextronics share or $3.89 in cash
|
| Announcement date: | June 4
|
| Expected closing: | By the end of 2007
|
| Stock price for acquirer: | Nasdaq: FLEX: $11.70 on June 1
|
| Stock price for target: | NYSE: SLR: $3.37 on June 1
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
