Electronics Production | July 26, 2007

Flex-Solectron will be a very strong buyer

Flextronics estimates that the combination with Solectron will yield after-tax synergies of at leased $200 million per year. Flextronics mentioned that it will gain more Purchasing Power through this deal.
Flextronics has listed six areas as sources of cost synergies. The $200 million in synergies do not include the restructuring charges necessary to achieve the benefits:

- Purchasing Power
- Corporate sales and Marketing
- Vertical Integration
- Capacity Rationalization
- Indirect Manufacturing Costs
- IT-system

"By joining forces, we expect the increased scale will enable us to further extend our market segment reach and leverage an increased vertical integration capability, realize significant cost savings, and better serve the needs of our combined customers, employees and shareholders", Mike McNamara, CEO Flextronics said during a conference.


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