NXP Swapping Assets for Trident Microsystems Stake

AMSTERDAM (Reuters) – NXP Semiconductors is swapping its TV and set-top box chip assets for a majority stake in U.S. peer Trident Microsystems (TRID.O), which will boost Trident’s share of the digital home entertainment market.

Privately held Dutch company NXP will end up with a 60 percent stake in Trident, which makes chips and software used in digital TVs, the two companies said in a statement.

NXP will swap the assets for new shares in Trident, and will also buy 6.7 million shares for $4.50 each, they said.

“This proposed transaction enables Trident to achieve the economies of scale required to compete in the digital home market, while also taking advantage of our start-up culture and cost-efficient Asia-based engineering and operations,” Trident chief executive Sylvia Summers said in the statement.

Christos Lagomichos from NXP’s Home business unit will become president of Trident, while Summers will remain CEO.

Trident estimates that the digital home market will reach $5 billion by 2010 and hopes assets from NXP, which was founded by Philips Electronics (PHG.AS) five decades ago, will raise its global profile.

NXP has been restructuring its operations and financing since private equity firms including KKR [KKR.UL] (KKR.AS) bought about 80 percent of NXP in 2006.

Trident expects to generate $140 million to $160 million in revenue in its second quarter of 2010, its first full quarter after the closing of the deal.

In a separate statement, it also revised upward its guidance for its first fiscal quarter ended Sept. 30 to $31 million from $22 to $25 million.

The deal with NXP is expected to close in the first quarter of 2010, subject to Trident shareholder approval, regulatory approval and other conditions, Trident and NXP said.

(Reporting by Greg Roumeliotis, editing by Will Waterman)