Infineon is to buy Cypress in a transaction which should create a company with over $10 billion in revenue and take the No.8 position in the semiconductor world rankings.
Infineon is paying $23.85 per share compared to the $17.82 closing price on Friday giving Cypress an enterprise value of €9 billion compared to its market cap of $6.5 billion last week.
“The planned acquisition of Cypress is a landmark step in Infineon’s strategic development,” says Infineon CEO Reinhard Ploss, “we will strengthen and accelerate our profitable growth and put our business on a broader basis. With this transaction, we will be able to offer our customers the most comprehensive portfolio for linking the real with the digital world. This will open up additional growth potential in the automotive, industrial and Internet of Things sectors. This transaction also makes our business model even more resilient. We look forward to welcoming our new colleagues from Cypress to Infineon. Together, we will continue our shared commitments to innovation and focused R&D investments to accelerate technology advancements.”
With the addition of Cypress, Infineon will consequently strengthen its focus on structural growth drivers and serve a broader range of applications.
This will accelerate the company’s path of profitable growth of recent years.
Cypress has a differentiated portfolio of microcontrollers as well as software and connectivity components that are highly complementary to Infineon’s leading power semiconductors, sensors and security solutions.
Combining these technology assets will enable comprehensive advanced solutions for high-growth applications such as electric drives, battery-powered devices and power supplies.
The combination of Infineon’s security expertise and Cypress’s connectivity know-how will accelerate entry into new IoT applications in the industrial and consumer segments. In automotive semiconductors, the expanded portfolio of microcontrollers and NOR flash memories will offer great potential, especially in light of their growing importance for advanced driver assistance systems and new electronic architectures in vehicles.
With the addition of Cypress’s R&D and geographical presence in the U.S, Infineon not only strengthens its capabilities for its major customers in North America, but also in other important geographical regions.