Tuesday, 5 June 2007

Flextronics To Purchase Solectron for USD3.6B

World’s largest contract electronics manufacturer Flextronics International Ltd. plans to acquire rival Solectron Corp. to create an electronics manufacturing services powerhouse...

World’s largest contract electronics manufacturer Flextronics International Ltd. plans to acquire rival Solectron Corp. to create an electronics manufacturing services powerhouse with more than USD30 billion in annual revenue, Flextronics said today.

Singapore based USD 16 billion Flextronics would acquire Milpitas, Calif.-based Solectron in a stock and cash deal worth about .6 billion. The combined company would operate in 35 countries, with a combined employee base of about 200,000 people, including about 4,000 design engineers, Flextronics said in a press release.

Both companies provide contract-manufacturing services to a variety of industries. Flextronics focuses on electronics design, engineering and manufacturing services to manufacturers serving the automotive, computing, and consumer digital and medical industries. Solectron focuses on design, supply chain management and product warranty repair services to companies serving the networking, telecommunications, computing, storage, automotive, medical and defense industries.

Flextronics said the deal would help the two companies improve their product development processes and supply chain management.

Solectron's strength in high-end computing and telecommunications will be an "invaluable addition" to Flextronics, CEO Mike McNamara said in a statement. "We will be a larger, more competitive company and therefore better positioned to deliver supply chain solutions that fulfill our customers' increasingly complex requirements," he added.