NXP Semiconductors N.V. (NASDAQ: NXPI) traded down slightly Tuesday morning after the announcement that it will shed some of its key assets. The company announced an agreement to divest its Standard Products business to a consortium of financial investors consisting of Beijing Jianguang Asset Management and Wise Road Capital.

Under the terms of the agreement, the consortium will pay roughly $2.75 billion for the business. The transaction is expected to close in the first quarter of 2017, pending regulatory approvals and employee representative consultations.

Also per the agreement, the entire scope of the NXP Standard Products business, including its management team, led by Frans Scheper, and roughly 11 thousand NXP employees will be transferred to Nexperia. Nexperia will be an independent company incorporated in the Netherlands and fully owned by JAC Capital and Wise Road Capital upon the close of the transaction.

Additionally, NXP’s Standard Product front-end wafer fabs in Manchester, United Kingdom, and Hamburg, Germany, and the back-end facilities in Guangdong, China, Seremban, Malaysia, and Cabuyao, Philippines, will be transferred to Nexperia, as well as the in-house equipment manufacturer ITEC and all relevant patents and intellectual property associated with the Standard Products business.

Rick Clemmer, CEO of NXP, commented:

This transaction is a positive accomplishment for all parties involved. It enables NXP to continue to focus on its High-Performance Mixed Signal business, furthering our Secure Connections for a Smarter World strategy. We believe the creation of Nexperia benefits our customers, as JAC Capital and Wise Road Capital will focus on global investments to enhance and support the future growth of the business.

Michael Zhang, managing partner of Wise Road Capital, added:

We are committed to provide Nexperia the capital it requires to accelerate its global growth strategy, which we believe will help to accelerate product introductions in key target markets, while assuring no disruption to Nexperia’s global customer and supplier base. Although servicing a variety of markets, Nexperia will be especially increasing focus on automotive applications and providing their required high-level of quality solutions. In addition, we will help Nexperia expand its strong position in the fast-growing global emerging markets, through our strong network of industrial leaders.

Shares of NXP were last seen down 0.8% at $86.67, with a consensus analyst price target of $109.33 and a 52-week trading range of $61.61 to $106.57.

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