Xbox 360 Maker Mega-Merger: Flextronics Buys Solectron

Singapore's Flextronics International Ltd. [one of the companies producing the Xbox360] will buy rival contract electronics maker Solectron Corp. for about $3.6 billion in cash and stock. Solectron shares climbed more than 14 percent in morning trading.

Under the deal announced Monday, Solectron will become a subsidiary of Flextronics, with Solectron shareholders holding a stake of between 20 percent to 26 percent.

Flextronics, whose customers include Casio Computer Co., Dell Computer Corp., Eastman Kodak Co. , Ericsson Telecom AB, Hewlett-Packard Co. , Microsoft Corp. , Motorola Inc., Nortel Networks Ltd., Sony-Ericsson and Xerox Corp. , expects the deal to add at least 15 percent to its earnings.

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