Freescale Semiconductor, a privately owned developer of various microcontrollers and microprocessors for different applications, said on Monday that it has reached a definitive agreement to acquire SigmaTel, a company known for its multimedia chips. If the transaction proceeds as planned, Freescale will be able to offer highly-integrated multimedia platforms for various devices.

Under the terms of the agreement, Freescale will pay $3.00 cash per outstanding share of SigmaTel stock, or approximately $110 million in total. The agreement contains a “go-shop” provision through March 4, 2008, during which period SigmaTel has the right to solicit and engage in discussions and negotiations with respect to potential competing proposals.

Freescale Semiconductor offers its customers a wide range of multimedia and non-multimedia processors or microcontrollers, but there are some fields where the company would like to boost its strength. In particular, Freescale said it would welcome SigmaTel’s analog and mixed-signal IC products into its portfolio, which will allow the firm to offer highly-integrated multimedia platforms for various digital media players, high-definition video players, HDTVs and so on.

“The SigmaTel acquisition enhances the long-term, strategic value we can deliver to our customers. Freescale’s proven strengths in the high- performance multimedia and general purpose markets are complemented by SigmaTel’s strong analog and mixed-signal expertise in the portable media player and consumer audio markets,” said Lynelle McKay, senior vice president and general manager of Freescale’s networking and multimedia group.

The agreement is subject to various customary closing conditions, including all necessary shareholder and regulatory approvals, and is expected to close in the second quarter of 2008.

“The increased demand for feature rich, always-connected consumer electronics devices is driving manufacturers to look for platform-based solutions that will accelerate time to market,” said Phil Pompa, president and chief executive of SigmaTel. “With the addition of SigmaTel, Freescale is the obvious choice for these next-generation devices.”

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