Big news Tina!
To: All Solectron Employees
From: Paul Tufano, EVP and Interim CEO
Date: June 4, 2007
Subject: Solectron and Flextronics to Merge
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Solectron and Flextronics to combine to create $30 billion global leader
Just a few minutes ago Flextronics and Solectron announced an agreement to merge the two companies (see attached press release and note from Mike McNamara (CEO of Flextronics) and me). We decided to bring the two companies together because we are convinced that together we will be a stronger, more profitable and ultimately more successful player in the highly competitive global EMS market.
After 30 years in business, I suspect many of you are receiving this news with some degree of surprise. We’ve spent the past several weeks analyzing the combination, and the benefits for shareholders, customers and employees are truly compelling. The challenges of today’s global marketplace are significant. Many experts believe the EMS industry is primed for consolidation, and today we have announced plans to merge two of the strongest global players together and create a powerful industry leader.
While much about our cultures are similar, we are fortunate to have little vertical market or geographic overlap, which minimizes redundancies. The resulting combination will be fully able to leverage Flextronics’s robust vertical integration, with strength across virtually all vertical markets and geographies and the industry’s strongest suite of capabilities.
I’m sure one of your first questions is how is this going to affect you. In terms of a timeline, we expect this transaction to close before the end of the calendar year. During this time we will continue to compete in the market as separate companies. However, we will shortly be establishing joint integration and planning teams (as permitted by law) and will communicate our plans as they solidify in the months ahead.
Solectron and Flextronics have many customers and suppliers in common. It is important that we stay focused on meeting the expectations of our customers and shareholders, and that business continues unimpeded during this interim phase. We’re bringing our two great companies together to create something even stronger and better, and we can’t allow ourselves to become distracted during this transition phase.
I’ll be hosting a call later today, at 5pm Pacific, and you are all invited to log in via phone lines or webcast. For those who are not able to join, we’ll have a replay available on SolectronWorld beginning two hours after the call. Details on that call will be distributed later today.
We’ll continue to communicate with you regularly during the months ahead, and your managers as always will be important sources of information and guidance. I look forward to speaking with you in a few hours, where we’ll tackle some of the most obvious questions that are likely on your mind.
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