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  Date: 3rd Jan 2011

NXP terms its latest business divestment as another milestone

NXP Semiconductors has announced that it has signed a definitive agreement with Dover Corporation where Dover's affiliate Knowles Electronics will acquire NXP's Sound Solutions business of speaker and receiver components for the mobile handset market. NXP says this decision will allow it to further focus its resources on its core High Performance Mixed Signal business. Under the terms of the agreement, Knowles will acquire Sound Solutions for $855 million in cash. In conjunction with the transaction, NXP and Knowles have agreed to the terms of a strategic relationship whereby NXP will become Knowles' exclusive source for certain High Performance Mixed Signal semiconductors. The transaction is expected to close in the first quarter of 2011.

Knowles is rated as the world's largest manufacturer of high performance transducers used for hearing aids and other high quality acoustic applications, whose products also includes MEMS microphones for personal mobile device and communications markets.

"Combining the operations of Sound Solutions and Knowles represents another major milestone in our strategy of focusing on High Performance Mixed Signal markets, and it will help to further improve our capital structure," said Rick Clemmer, President and CEO, NXP Semiconductors. "The micro-acoustic components market offers significant growth potential, which can be best achieved through a focused company, dedicated to this market and with a complete suite of complementary products required for a leadership position. We look forward to participating in that growth as a strategic supplier to Knowles going forward."

NXP has announced its revenue of the Sound Solutions business was approximately $255 million in the first three quarters of 2010. About 1,000 Sound Solutions employees, who are currently based in Sound Solutions' headquarters in Vienna, Austria, and its facilities located in Beijing, China, will join Knowles as per NXP.

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