Motorola, Flextronics Change Terms of a Deal
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Motorola Inc. and Flextronics International Ltd., the second-biggest contract electronics manufacturer, said they’re changing the terms of a $30-billion, five-year agreement because of weaker-than-expected demand.
The companies said they’re removing the volume incentives and five-year terms of the deal under which Flextronics makes mobile phones, pagers and other devices for Motorola. They didn’t specify new terms.
Flextronics also will buy back, at a “modest premium,” about a 5% stake that Motorola bought for $100 million under the May 2000 agreement, the companies said.
Before the announcement, shares of Schaumburg, Ill.-based Motorola rose 21 cents to $16.77 and Singapore-based Flextronics fell 4 cents to $26.07.
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