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STMicro up on breakup report that company denies

Source : AP
Last Updated: Fri, Oct 12, 2012 17:30 hrs

Shares of STMicroelectronics N.V., Europe's largest chipmaker, climbed Friday after a report that it is looking to split in two. The company denied the report.

THE SPARK: Bloomberg News reported, based on unnamed sources familiar with the matter, that the Switzerland-based company is looking at separating the business that makes analog chips and sensors for into cars, smartphones and other gadgets, from its digital chipmaking business, which also supplies phone makers.

In a statement, STMicroelectronics said it "denies the existence of initiatives which can compromise the unity of the company."

THE ANALYSIS: The digital business has been suffering from the decline of some of its prime customers, like Nokia Corp. and Research In Motion Ltd. Meanwhile, the analog side has been doing well — among its key products are the motion sensors that let iPhones determine if they're being held vertically or horizontally.

SHARE ACTION: The company's U.S. traded shares were up 42 cents, or 7.5 percent, at $6.06 in afternoon trading. In earlier trading in Paris, the shares were up as much as 19 percent before ending the day up 6.4 percent.




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