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German Infineon to acquire U.S. Cypress Semiconductor for 9 bln euros

BERLIN
2019-06-03 22:17

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BERLIN, June 3 (Xinhua) -- Infineon, Germany's largest manufacturer of computer chips, is planning to take over its U.S. rival Cypress Semiconductor for around 9 billion euros (10.1 billion U.S. dollars), the two companies announced on Monday.

"We will strengthen and accelerate our profitable growth and put our business on a broader basis," said Reinhard Ploss, chief executive officer (CEO) of Infineon.

In the course of the acquisition, Infineon will offer 23.85 U.S. dollars for the shares of Cypress Semiconductor, a manufacturer and designer of semiconductors.

Infineon will thereby offer a premium of around 46 percent on the average price of Cypress shares between mid-April and the end of May when first reports of the take-over became public.

"The Cypress team is excited to join forces with Infineon to capitalize on the multi-billion dollar opportunities from the massive rise in connectivity and computing requirements of the next technology waves," said Cypress Semiconductor's CEO Hassane El-Khoury.

Germany's largest manufacturer of computer chips is planning to pay 30 percent of the purchase price through equity. The remainder is to be financed by taking on debt as well as by "cash on hand", Infineon announced.

With the acquisition of Cypress Semiconductor, Infineon would be able to offer more "comprehensive advanced solutions for high-growth applications" such as electrical power trains, battery-powered devices as well as power supplies, the German company announced on Monday.

Following the take-over, Infineon is targeting sales growing by around 9 percent. In the long term, the German chip manufacturer is expecting sales synergies of around 1.5 billion euros per year. In addition, the merger is expected by Infineon to reduce costs by around 180 million euros annually.

According to Infineon, the merger with Cypress Semiconductor is scheduled to be closed between the end of 2019 and the beginning of 2020.

The acquisition of Cypress Semiconductor would be the largest in Infineon's history. The most expensive acquisition of the German chip manufacturer to date was that of International Rectifier. In January 2015, Infineon closed the acquisition of the U.S. power management technology company for around 3 billion euros.

Investors were skeptical about the plans to acquire Cypress Semiconductor. Shares of Infineon fell by more than 8 percent and were the biggest loser in the German stock index DAX on Monday.

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