Infineon to buy Cypress Semiconductors in $10 billion deal


Infineon approved Cypress Semiconductors in a transaction assessed by microchip producers in the US, which is used in cars and electronic devices to buy 9 billion. Euro ($ 10.1 billion), including debt, according to a German company on Monday.
A cash offer of $ 23.85 per share was a 46% premium at Cypress’s stock price last month, said the German chip manufacturer for power management, which is used in cars, smartphones and wind turbines.
“With the introduction of Cypress, Infineon will increasingly focus on structural growth engines and cover a wider range of applications,” he added.
Infineon shares traded more than 5% less than 7:30 GMT, with some traders questioning whether Infineon would not pay.
German chipmaker said it would finance around 30% of the total value of transactions involving stocks and deposits with a combination of debt and cash.
Asked how the transaction was completed, Infineon Marketing Chief Helmut Gasset said the discussion was triggered by interest expressed by other Cypress. Infineon was invited to participate in the process about five weeks ago, he said.
The acquisition will bring in 2022 and synergies with a turnover of more than 1.5 billion euros in long-term synergy prices of 180 million euros per year, Infineon said.
According to Cypress Semiconductors, Infineon is expected to increase revenue by a cycle of 9% or more, and increase the margin of the segment – 19%. The investment ratio must decrease to 13%.
Infineon hopes that the investment rating ranking will remain after the deal, said CFO Sven Schneider.
However, Infineon’s leverage ratio, measured as debt to profit before interest, tax, depreciation (EBITDA) will exceed the target twice before the rate returns at the end of 2022, said Schneider analysts.
Cypress’s board of directors and Infineon’s supervisory board have approved the acquisition, which is expected by the end of 2019 or early 2020

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