Under the deal, each Solectron share will be converted into the right to receive either 0.3450 Flextronics share or $3.89 cash, subject to certain conditions, the company said.

The cash consideration represents a premium of 15 percent over Solectron's closing price on Friday, while the stock consideration represents a premium of about 20 percent.

Following the acquisition, Solectron will become a wholly-owned unit of Flextronics, and Solectron shareholders will own 20 percent to 26 percent of Flextronics' outstanding shares.

The combined company will have a work force of about 200,000, including about 4,000 design engineers. Their combined annual revenue will exceed $30 billion.

Flextronics said the combined entity could cut costs by up to $200 million, although it could take as much as 24 months to integrate the companies.

By: DocMemory
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