STMicroelectronics to acquire NXP’s MEMS sensors business for $950 million

GENEVA - STMicroelectronics (NYSE:STM) announced Thursday it has entered into an agreement to acquire NXP Semiconductors’ (NASDAQ:NXPI) MEMS sensors business for up to $950 million in cash, strengthening its position in the sensors market. NXP, with a market capitalization of $56.77 billion, is a prominent player in the Semiconductors industry, maintaining strong financial health with a current ratio of 1.74. According to InvestingPro, 17 analysts have recently revised their earnings expectations upward for the company.

The deal includes $900 million upfront payment and an additional $50 million subject to achieving technical milestones. The transaction is expected to close in the first half of 2026, pending regulatory approvals.

NXP’s MEMS business, which generated approximately $300 million in revenue in 2024, primarily focuses on automotive safety sensors for airbags and vehicle dynamics, as well as pressure sensors and accelerometers for industrial applications.

"The planned acquisition is a great strategic fit for ST," said Marco Cassis, President of STMicroelectronics’ Analog, Power & Discrete, MEMS and Sensors Group. "These highly complementary technologies and customer relationships will strengthen our position in sensors across key segments."

The acquisition will be financed through existing liquidity and is expected to be accretive to ST’s earnings per share upon completion. According to the company, the MEMS business being acquired has gross and operating margins that are "significantly accretive" compared to ST’s current levels.

Jens Hinrichsen, Executive Vice President at NXP, stated that after a portfolio review, the company determined the MEMS sensor business "does not fit into its long-term strategic direction."

The combined business will leverage ST’s integrated device manufacturer model, which involves all stages of MEMS development from design to packaging. The company noted that MEMS inertial sensors in automotive applications are expected to grow faster than the broader MEMS market.

According to the press release statement, the expanded product offering will be balanced across automotive, industrial, and consumer end markets.

In other recent news, NXP Semiconductors has garnered attention following its latest earnings report, which exceeded expectations and led the company to raise its guidance for the coming quarter. This positive performance has prompted several investment firms to adjust their price targets for the company. Truist Securities increased its target to $252, citing the company’s modest second-quarter earnings beat and improved third-quarter guidance. Similarly, Cantor Fitzgerald raised its target to $280, noting NXP’s solid performance and potential for a slight upside in the fourth quarter. Bernstein SocGen Group also adjusted its target to $220, acknowledging a "fine" earnings report and a potential positive shift in industry trends. Meanwhile, Needham boosted its target to $250, reflecting confidence in the ongoing cyclical recovery within the semiconductor sector. Additionally, Raymond James reiterated an Outperform rating with a $250 target, emphasizing NXP’s strategic geographic positioning. These recent developments highlight a growing optimism among analysts regarding NXP Semiconductors’ future prospects.

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