Flextronics International plans to acquire rival Solectron to create an electronics manufacturing services powerhouse with more than US$30 billion in annual revenue, Flextronics announced Monday.
Flextronics, located in Singapore, would acquire Solectron, based in Milpitas, California, in a stock and cash deal worth about US$3.6 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 manufacturing services to a variety of industries. Flextronics focuses on electronics design, engineering and manufacturing services to OEMs (original equipment manufacturers) serving the automotive, computing, consumer digital and medical industries. Solectron focuses on design, supply chain management and product warranty repair services to companies serving the networking, telecom, computing, storage, automotive, medical and defense industries.
The deal will help the two companies improve their product development processes and supply chain management, Flextronics said in a press release.
Solectron's strength in high-end computing and telecom will be an "invaluable addition" to Flextronics, 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.
In February, Solectron's CEO Michael Cannon resigned to join Dell Inc, as president of global operations.
The merger is expected to close by the end of the year. The deal needs approval from shareholders from both companies as well as possible regulatory approvals, Flextronics said.