Freescale Semiconductor has agreed to be acquired by a group of investment firms for US$17.6 billion.A consortium of four private equity firms plans to buy the big Austin, Texas, chipmaker for $40 per share in cash. The deal is subject to regulatory approvals and a vote by Freescale shareholders. Freescale’s board of directors has unanimously approved the sale, the company announced Friday. The offer price represents an approximately 36 percent premium over the company’s average closing share price in the 30-day period that ended Sept. 8.Freescale, a spin-off of Mo, went public on its own in 2004 and had sales of $5.8 billion in 2005. It designs and manufactures embedded networking, wireless, automotive, industrial and consumer product chips. Under the deal, Freescale is allowed to solicit other proposals for the next 50 calendar days and can respond to unsolicited offers, subject to a deal breakup fee. The consortium is led by The Blackstone Group in New York, and includes The Carlyle Group, Permira Funds and Texas Pacific Group.The buyers probably want to split Freescale up into three companies in a series of initial public offerings, said Forward Concepts analyst Will Strauss. The company has been generally successful in the automotive, networking and wireless chip businesses and has seen its stock rise since the spinoff, he said. Those three main businesses could be easily spun off separately, he said. It’s common for private investors to buy a company so they can make changes that would be harder to carry out if it remained public, said Nathan Brookwood, an analyst at Insight 64. Even if the board wanted to remain in control of Freescale, they had little choice with private investors willing to pay a significant premium, Strauss said.“The stockholders would tar and feather the board if they didn’t accept the offer,” he said.Freescale is the biggest supplier of automotive chips in North America, has a strong business in processors for network gear and is still the exclusive supplier to Motorola of some key cell-phone chips, while expanding its customer base, Strauss said. Freescale customers probably won’t feel any impact from the buyout, at least in the next six months, he said.-Stephen Lawson, IDG News Service (San Francisco Bureau)Check out our CIO News Alerts and Tech Informer pages for more updated news coverage. Related content brandpost Sponsored by Freshworks When your AI chatbots mess up AI ‘hallucinations’ present significant business risks, but new types of guardrails can keep them from doing serious damage By Paul Gillin Dec 08, 2023 4 mins Generative AI brandpost Sponsored by Dell New research: How IT leaders drive business benefits by accelerating device refresh strategies Security leaders have particular concerns that older devices are more vulnerable to increasingly sophisticated cyber attacks. By Laura McEwan Dec 08, 2023 3 mins Infrastructure Management case study Toyota transforms IT service desk with gen AI To help promote insourcing and quality control, Toyota Motor North America is leveraging generative AI for HR and IT service desk requests. By Thor Olavsrud Dec 08, 2023 7 mins Employee Experience Generative AI ICT Partners feature CSM certification: Costs, requirements, and all you need to know The Certified ScrumMaster (CSM) certification sets the standard for establishing Scrum theory, developing practical applications and rules, and leading teams and stakeholders through the development process. By Moira Alexander Dec 08, 2023 8 mins Certifications IT Skills Project Management Podcasts Videos Resources Events SUBSCRIBE TO OUR NEWSLETTER From our editors straight to your inbox Get started by entering your email address below. Please enter a valid email address Subscribe