This is a big deal in the world of contract manufacturing -- Flextronics International Ltd. announced this morning that it is buying Solectron Corp. The combined companies will have plants in 35 countries, employing approximately 200,000 people, including 4,000 design engineers. Annual sales will top $30 billion. The acquisition is being made via a stock swap, and Flextronics values the offer at $3.6 billion. Following the acquisition, Solectron will become a wholly owned subsidiary of Flextronics, and Solectron shareholders will own approximately 20-26 percent of Flextronics's outstanding shares. Mike McNamara, Chief Executive Officer of Flextronics, had this to say about the deal:
"By joining forces, we expect the increased scale will enable us to further extend our market segment reach and leverage an increased vertical integration opportunity, realize significant cost savings, and better serve the needs of our combined customers, employees and shareholders. Solectron's strength in the high-end computing and telecom segments will be an invaluable addition to Flextronics's existing capabilities and the combined company will be a market leader in most product market segments. We will be a larger, more competitive company and therefore better positioned to deliver supply chain solutions that fulfill our customers' increasingly complex requirements."In addition to contract manufacturing and supply chain management, Flextronics is a major player in plastics injection molding. In 2005, for example, we wrote that Singapore-based Flextronics had more than 1,100 thermoplastic injection molding machines.
