NXP Semiconductors will acquire the Broadband Media Processing business of Conexant System. With this transaction, NXP’s existing set-top box and digital TV operations will be combined with Conexant’s BMP business. The combined operations will create a top three player in digital video systems with the scale to establish a strong leadership position. The deal represents NXP’s fourth acquisition since independence and is the first for its Home Business Unit.

Conexant’s BMP business, which provides industry-leading solutions for satellite, cable and IPTV applications, accounted for US $205 million in revenue in 2007. 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.

Conexant’s strengths in broadcast operator STB solutions are complementary to NXP’s terrestrial IP and retail STB and Digital TV products. Combined, they will offer the widest semiconductor portfolio for STB and digital TV applications in the industry, creating a unique technology source for developing digital video applications: innovative IC solutions for receiving more digital content in terrestrial, cable, satellite and IPTV broadcast environments with best in class picture and sound quality, anytime, anywhere in the home.

When the transaction closes, approximately 700 Conexant employees at locations in the United States, India, Northern Ireland, Israel and China will join NXP’s Home Business Unit. The transaction is subject to customary closing conditions and regulatory approvals, and is expected to close in the next 60 days.

Conexant’s BMP business being acquired by NXP offers a comprehensive suite of digital STB components and system solutions for worldwide satellite, cable and IP entertainment broadcasting networks. The company’s product offering includes silicon tuners, demodulators, MPEG audio and video decoders, and DOCSIS modems. Complete reference designs that help manufacturers reduce cost and speed time-to-market are also available, bundled with a range of operating systems, middleware, drivers and development tools.