BY Richard Summerfield
Cypress Semiconductors is to be acquired by Infineon in a $10bn deal, including debt, the companies have announced.
The cash offer of $23.85 per share represents a 46 percent premium to Cypress’ share price over the last month. The deal, which is subject to regulatory approval, is expected to close by the end of 2019 or in early 2020. The companies expect the merger to generate around $180m in cost synergies.
The combined company will be the world’s eighth largest chipmaker and the largest suppler of chips to car and vehicle companies. The purchase has been underwritten by a bank consortium. Infineon expects that approximately 30 percent of the $10bn price tag will be financed through equity, while the rest will be managed through debt and cash on hand reserves.
“The planned acquisition of Cypress is a landmark step in Infineon’s strategic development,” said Reinhard Ploss, chief executive of Infineon. “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.”
“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 Hassane El-Khoury, president and chief executive of Cypress. “This announcement is not only a testament to the strength of our team in delivering industry-leading solutions worldwide, but also to what can be realized from uniting our two great companies. Jointly, we will enable more secure, seamless connections, and provide more complete hardware and software sets to strengthen our customers’ products and technologies in their end markets. In addition, the strong fit of our two companies will bring enhanced opportunities for our customers and employees.”
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