German semiconductor solutions provider Infineon Technologies is acquiring California-based Cypress Semiconductor Corp. for €9 billion ($10.1 billion).
Infineon CEO Reinhard Ploss said in a media statement that the planned acquisition is a move to strengthen growth potential in the automotive, industrial and Internet of Things (IoT) sectors.
The combination of Infineon’s security expertise and Cypress’s connectivity know-how, for example, is expected to 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 architecture in vehicles, according to Ploss.
With the addition of Cypress’s strong R&D and geographical presence in the US, Infineon adds to its R&D presence in Silicon Valley and gains presence, as well as market share, in the strategically important Japanese market.
“Together, we will continue our shared our commitments to innovation and focused R&D investments to accelerate technology advancements,” Ploss said.
Headquartered in San Jose, Cypress provides advanced embedded solutions for automotive, industrial, smart home appliances, consumer electronics and medical products. Its microcontrollers, wireless and USB-based connectivity solutions, analog ICs, and high-performance memories help engineers design differentiated products and get them to market.
Hassane El-Khoury, President and CEO of Cypress, said jointly with Infineon, it will be able to provide a more complete hardware and software sets to their end markets.
“This transaction will create product opportunities that are increasingly important in the competitive automotive, industrial, and consumer markets,” affirmed Steve Albrecht, Chairman of the Board of Directors of Cypress.
Number 8 chip manufacturer
Based on pro forma revenues of €10 billion in FY 2018, the transaction will make Infineon the number eight chip manufacturer in the world. Infineon is also poised to become the number one supplier of chips to the automotive market.
Under the financial terms of the agreement, Infineon will offer $23.85 in cash for all outstanding shares of Cypress, which corresponds to a fully diluted enterprise value for Cypress of €9 billion.
“The offer price represents a 46% premium to Cypress’s unaffected 30-day volume-weighted average price during the period from 15 April to 28 May 2019, the last trading day prior to media reports regarding a potential sale of Cypress,” Infineon said.