Solectron To Acquire TI's Custom Manufacturing Business
MILPITAS, CA (January 30, 1996) - Texas Instruments Incorporated (NYSE: TXN) and Solectron Corporation (NYSE: SLR) today announced that they have reached agreement for Solectron to purchase TI's custom manufacturing services (CMS) business. This business, with headquarters in Austin, Texas, will be acquired for approximately $130 million, subject to adjustments at closing. Solectron, an increasingly important semiconductor customer of TI's, will also be recognized by TI as a strategic supplier of electronics manufacturing services. Under terms of the agreement, Solectron will purchase the assets of TI's CMS business in Austin, Texas and Kuala Lumpur, Malaysia, and will offer employment to TI-CMS employees at both sites. Solectron will lease space in TI's Austin and Malaysia facilities and will continue production at these sites.
TI's CMS operations located in Aversa, Italy, are not included in the sale and will remain under TI ownership and management. This faclity will provide manufacturing services for Solectron on a turnkey or sub-contract basis.
"TI is one of the premier electronics manufacturers and we are very excited about the relationship we are developing," said Dr. Koichi Nishimura, Solectron President and CEO. "This transaction is expected to provide our customers with additional regional manufacturing capacity and improved execution when their product designs utilize TI semiconductor components."
"Custom manufacturing is Solectron's only business and they have been highly successful in expanding their operations worldwide," said David D. Martin, TI Executive Vice President. "This transaction will enable us to better focus our resources on TI's strategic businesses while providing excellent growth opportunities for the people who have made TI's CMS business a world-class operation. We also expect this transaction to be the first step in a longer-term partnership with Solectron."
TI's other operations in Austin and Kuala Lumpur will not be affected by this transaction and will continue to operate at their present locations.
Solectron's purchase of TI's CMS business is expected to be completed by April 1996. No other terms of the transaction were disclosed. Completion of the purchase of TI's CMS business is subject to appropriate regulatory and corporate approvals.
"Combining TI's excellence in materials, manufacturing, and engineering, with Solectron's award-winning global capabilities, will provide a winning combination for the future," said Ron Shelly, TI Executive Vice President for CMS. Mr. Shelly will continue to manage this business as president of Solectron Texas.