NXP Semiconductors and Freescale Semiconductor today announced the completion of the nearly $12 billion merger deal, which will result in the establishment of the world's top maker of automotive electronics. The merged entity will continue operations as NXP Semiconductors N.V. and has become the market leader in automotive semiconductor solutions and in general purpose microcontroller (MCU) products.

"Through this merger we have created an industry powerhouse focused on the high growth opportunities in the Smarter World, capitalizing on the emerging opportunities offered by the accelerating demand for connectivity, processing and security. Today’s formation of the new NXP is a transformative step on our journey to become the industry leader in high performance mixed signal solutions," said Rick Clemmer, NXP Chief Executive Officer.

NXP automotive unit chief executive Kurt Sievers said that the combination will allow the company to assemble a range of discreet automotive applications into more complete systems running on top of Freescale processors. It propels NXP into new application areas in cars including powertrain, safety and body electronics, Sievers said, building on its existing leading positions in audio infotainment, security and vehicle networks. It also aims to build security into critical car systems to guard against hacker threats.

NXP's merger bolsters its position not just in cars, but other fast-growing chip markets, including home automation, wearable devices and health monitors, while also capitalizing on the company's strength in security and payment chips.

One new product category NXP expects to develop using Freescale technology is a single integrated radar chip.

It is betting this single chip can replace current ultrasonic radar devices used in advanced vehicle safety systems.

A second product category will be multimedia processors that can allow NXP to expand its position in audio information systems into other areas of infotainment including video display dashboards.

The transaction is expected to be accretive to NXP non-GAAP earnings in 2016, and NXP anticipates achieving cost savings of $200 million in 2016 with a clear path to $500 million of annual cost synergies.

NXP also today announced the closing of the divestiture of its RF Power business to Jianguang Asset Management Co. Ltd, after receiving official confirmation that JAC Capital has deposited the required funds at its bank in China to pay the purchase price.