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Technologies AG agreed to buy Cypress Semiconductor Corp. in a deal
that values the U.S. target at about $10 billion including debt, the
latest mega-deal for an industry grappling with slowing growth.
deal confers an enterprise value of 9 billion euros ($10 billion) on
Cypress, a memory chip maker re-positioning itself as a provider to
automobiles and other connected devices. Infineon’s cash offer of $23.85
a share marks a 46% premium to Cypress’s average price over the past 30
days, the companies said in a statement confirming an earlier Bloomberg
Shares of Infineon fell as much as 6.5% during early trading Monday in Frankfurt.
semiconductor industry has been reshaped over the past five years as
companies combine to gain scale while fighting rising costs and
shrinking customer bases. NXP Semiconductors NV recently announced a
$1.76 billion deal for Marvell Technology Group Ltd.’s Wi-Fi
connectivity business, while Nvidia Corp. agreed to buy chipmaker
Mellanox Technologies Ltd. for $6.9 billion in March.
Infineon until now has mostly sat on the sidelines. It’s lost almost a
third of its value over the past year, as the European chipmaker twice
revised its forecasts to account for global economic uncertainty and a
slowdown in Chinese car sales. Infineon’s offer values Cypress at
roughly $8.7 billion based on its outstanding shares alone, excluding
What Bloomberg Intelligence Says
reported plans to acquire Cypress may result in some arduous
integration work, with the buyer focused on power chips and the target
on Internet of Things and specialty memory. Infineon makes about a
quarter of its sales in China, which has turned into a headwind as the
economy slows. It will need stronger 2H sales to meet its 8 billion-euro