NXP Semiconductors NV is close to a deal to acquire smaller peer Freescale Semiconductor Ltd in a $40 billion cash and stock merger that will reshape the semiconductor industry, according to two people familiar with the matter.

Such a deal would represent the clearest sign yet that semiconductor companies are regaining the confidence required to pursue big mergers at a time when their major clients, such as mobile phone manufacturers, seek to consolidate suppliers.

Freescale has little exposure to the most segments of the mobile and consumer markets. By acquiring it, however, NXP would be expanding in the auto and industrial markets and would be diversifying its business further.

NXP is finalizing a deal to pay a little over Freescale's $11 billion current market capitalization, the people said. Including debt, the combined company will have a value of around $40 billion, the people added.

A deal could come as early as Monday, although the negotiations could still fall apart, the people said.

The sources asked not to be identified because the negotiations are confidential. NXP and Freescale did not immediately respond to requests for comment.

Based in Eindhoven, the Netherlands, NXP has operations in more than 25 countries and reported revenue of $5.7 billion in 2014. Austin, Texas-based Freescale also has operations in more than 25 countries and had net sales of $4.6 billion in 2014.