Chip giant Intel and memory outfit STMicroelectronics are set to join forces by merging their flash memory businesses. As well as manufacturing and sales, the new coalition will invest in research and development.
As part of the move, private equity firm Francisco Partners will become a major shareholder in the business, investing $150 million in cash to get the new entity off the ground. Both Intel and STMicroelectonics will sell their memory divisions to Francisco Partners in order to form the operation.
Daily Tech reported that the deal will give Intel 45.1 per cent equity ownership stake and $432 million in cash and STMicroelectronics will receive 48.6 per cent and $468 million in cash.
"From the outset, the company will be a leading supplier of flash memory solutions for wireless communications," said soon to be CEO of the new company Brian Harrison, currently vice president and general manager of Intel's Flash Memory Group.