(Photo: NXP)

Netherlands-based NXP has agreed to acquire Freescale, creating a mixed signal semiconductor group with combined annual revenue of more than 10 billion dlrs.

The two companies said in a press release that the combined group, which will have a leading position in automotive semiconductor products, will be able to, over time, generate annual savings of 500 million dlrs.

NXP will pay Freescale shareholders in cash and NXP stock.

"The combination of NXP and Freescale creates an industry powerhouse focused on the high growth opportunities in the smarter world," NXP CEO Richard Clemmer said in a press release. Clemmer also will  be CEO of the new company.

The transaction is expected to close in the second half of 2015.