Infineon Concludes Cypress Acquisition
Infineon Technologies AG has completed the acquisition of Cypress Semiconductor Corporation, which the German conglomerate is a landmark step towards its strategic development. The San Jose-based company would enable Infineon to offer its customers a comprehensive portfolio in realizing and shaping digitalization.
The addition of Cypress lets Infineon further strengthen its focus on structural growth drivers and on a broader range of applications. This will accelerate the company's path of profitable growth. Cypress adds a differentiated portfolio of microcontrollers, connectivity components, software ecosystems and high-performance memories.
All this, Infineon said, is highly complementary to its leading power semiconductors, automotive microcontrollers, sensors and security solutions. Combining these technology assets enables advanced solutions for high-growth applications such as ADAS/AD, IoT and 5G mobile infrastructure. The addition of Cypress' strong R&D capabilities and its foothold in United States and Japan strengthen Infineon's connections with customers around the world.
On 3 June 2019, Infineon and Cypress announced that the companies had signed a definitive agreement under which Infineon would acquire Cypress for US$23.85 per share in cash, corresponding to an enterprise value of €9 billion. The transaction has been approved by the Cypress shareholders and all required regulatory clearances have been obtained.
The acquisition is expected to be accretive to earnings in the 2021 fiscal year of Infineon. The profitability is expected to rise while capital intensity of the combined business will decrease, increasing free cash flow. Cost synergies of €180 million is expected, gradually ramping up over approximately three years.