The European Commission (EC) today announced that it has approved, under the European Union merger regulation, the proposed acquisition of Solectron by Flextronics International.

The rivaling companies announced in June their entrance into a definitive acquisition agreement that had been unanimously approved by the boards of both companies. As part of the deal, shareholders of Solectron will receive total consideration currently valued at approximately $3.6 billion, based on the closing price of Flextronics ordinary shares on June 1. Each share of common stock of Solectron will be converted into the right to receive, at the election of each of the individual holders of Solectron shares, either 0.3450 shares of Flextronics or a cash payment of $3.89 per share, subject to certain conditions.

The merged entity will likely be a strong contender for the top spot in the EMS game; Flextronics and Solectron ranked second and fifth, respectively, on a ranking EMS providers released last year by market research firm. The top contender was Taiwan-based Foxconn, also known as Hon Hai with $40.5 billion in sales for 2006. Flextronics and Solectron projected that their combined yearly revenues would be set to exceed $30 billion.

By: DocMemory
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