On June 3, German chip maker Infineon announced that it had agreed to acquire American chip maker Cypress Semiconductor. Including debt, the deal valued Cypress at € 9 billion (about $ 10.1 billion). Infineon said the company will buy Cypress for $ 23.85 per share in cash, a 46% premium to Cypress's share price last month. Cypress produces microchips for automotive and electronic equipment.
The transaction is expected to be completed by the end of this year or early 2020. Infineon estimates that by 2022, the annual cost synergy will reach 180 million euros, and in the long run, the annual revenue synergy will exceed 1.5 billion euros.
Infineon said that the two companies are highly complementary in terms of technology, and the acquisition will help further expand the potential in fast-growing markets such as automotive, industrial and IoT. Infineon Chief Executive Officer Reinhard Ploss said: "The acquisition of Cypress is an important step for Infineon's strategic development and will help strengthen and accelerate our profitable growth and conduct our business on a broader basis. "
Infineon's current market value is 18.2 billion euros ($ 20 billion). Over the past five years, most companies have been on the sidelines due to mergers and acquisitions and restructurings in the semiconductor industry. Recently, due to the global economic uncertainty and the slowdown of China's car sales, Infineon's stock price has lost nearly a third of its value in the past year, and the company has revised its financial forecast twice.
On the other hand, Steve Albrecht, chairman of the Cypress Board of Directors, said: "For Cypress shareholders, the company will continue to pay dividends until the transaction is completed, plus a cash price of $ 23.85, which will bring important value creation.
Cypress CEO Hassane El-Khoury also said, "Cypress is very pleased to work with Infineon to move towards the billions of dollars that could arise from the dramatic growth in demand for connectivity and computing in the next wave of technology business opportunities. "