NXP Semiconductors Completes Acquisition of Conexant's Set-top Box Operations

Deal Creates Unique Positioning to Drive Revolution in TV Viewing Experience

EINDHOVEN, The Netherlands — Following the announcement of April 29 this year, NXP Semiconductors, the independent semiconductor company founded by Philips, today confirmed the completion of the acquisition of the Broadband Media Processing (BMP) business of Conexant Systems, Inc., (NASDAQ:CNXT).

With this transaction, the first for its Home Business Unit, NXP’s existing set-top box (STB) and digital TV (DTV) operations will be combined with Conexant’s BMP business. NXP’s Home business unit adds high-performance STB system solutions for satellite, cable and IP STB, expanding its existing portfolio in terrestrial STB, IP STB and DTV. This makes NXP a top three technology player in the Digital Video Systems market (DTV and STB) with a unique IP, technology and talent portfolio to show for. NXP’s scale and infrastructure will further extend this technology leadership and reduce cost to create a powerful organization.

Christos Lagomichos, EVP and General Manager of NXP’s Home Business Unit, said: “Leadership and scale are vital to win, especially in a market that is consolidating. The combination of complementary digital TV expertise from two leading players gives NXP a market leading position and the R&D synergies required to be the first to bring innovative products to customers. Specifically, we aim to lead in the development of 45-nm based technology.

“We have completed the acquisition quickly and will maintain this pace by showcasing the joint product portfolio for the first time at IBC 2008 in September,” he added.

The global TV and STB market is at the start of a very exciting technological revolution and with the acquisition of the Broadband Media Processing group of Conexant, NXP will be a major contender in this market. With this deal, NXP offers its customers a unique technology proposition with strong DNA in STB and DTV, supporting our customers with professional people, IP, and a unique line-up of systems and components. In combination with the scale of the organization, it will enable NXP to bring innovations to market in a faster and more efficient way.

Under the terms of the deal, NXP will pay Conexant US$110 million in cash up front, and additional consideration of up to US$35 million based on achievement of certain revenue milestones over the period from closing through 2009.