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Solectron sets $2.4B bid
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October 31, 2000: 7:59 a.m. ET
Manufacturing services provider offers $4.53 a share for NatSteel
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NEW YORK (CNNfn) - Solectron Corp., which provides manufacturing and services to high-tech companies, offered Tuesday to acquire NatSteel Electronics Ltd. for $2.4 billion cash, in bid to expand its presence in the Asia/Pacific region.
Solectron, the leading supplier of electronics manufacturing services (EMS) on a contract basis, offered to pay $4.53 a share for rival NatSteel, the world's No. 6 provider of similar services to technology companies.
The purchase is contingent on holders of Singapore-based NatSteel tendering more than 50 percent of its shares. So far, Solectron said, it has received agreements for 43 percent of NatSteel's outstanding common shares.
Solectron builds computers and other electronics products for companies such as Hewlett-Packard (HWP: Research, Estimates), Cisco Systems (CSCO: Research, Estimates) and Sun Microsystems (SUNW: Research, Estimates). NatSteel makes printed circuit board assemblies and provides manufacturing services such as design, testing and logistics.
An Asian/Pacific presence
The NatSteel purchase will expand Solectron's manufacturing presence in the Asia/Pacific region, as well as in Europe and the Americas.
"The trend of original equipment manufacturers to outsource their manufacturing and supply-chain needs is now emerging in the Asia/Pacific region," Solectron CEO Koichi Nishimura said. "By acquiring NatSteel Electronics, we at Solectron would further strengthen our presence in this region, expand our capacity and solidify our leadership role in bringing the benefits of outsourcing to companies in Asia."
Milpitas, Calif.-based Solectron (SLR: Research, Estimates) plans to raise $2.5 billion by selling common stock and 20-year liquid yield option notes in a public offering. Net proceeds from the offering, which will be lead managed by Merrill Lynch, will be used to fund acquisitions including the purchase of NatSteel.
Solectron hopes to complete the acquisition by the end of December.
Solectron shares shed $4.31 to $43.63 in mid-morning trading Tuesday. 
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Solectron
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