EU to decide fate of chip megamerger

European flagThe semiconductor industry is undergoing a period of mergers and acquisitions but the path to unify companies is not always strewn with roses.

NXP Semiconductor – a Dutch firm which was spun off from Philips – wants to buy US competitor Freescale for $11.8 billion. A combined company would be worth over $40 billion.

But before it can snap up Freescale, NXP has to ask the European Union for approval – something it did last week.

The deal could pose some antitrust questions so the European Union regulator has to weigh up what effect the megamerger will have on the competitive landscape.

NXP and Freescale now compete, but if the merger gets the green light from the EU, there are still two companies that operate in the same sectors – Infineon and Japanese firm Renesas.