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Infineon to acquire US peer Cypress in €9B deal

Infineon Technologies AG struck a definitive agreement to acquire U.S. chipmaker Cypress Semiconductor Corp. for an enterprise value of €9.0 billion.

The German semiconductor maker will pay $23.85 in cash for each Cypress share. Infineon will fund 30% of the deal's total value with equity, with the remaining 70% to be financed with debt as well as cash on hand. A consortium of banks has fully underwritten the funding for the acquisition.

The deal will combine Infineon and Cypress' complementary tech portfolios, expected to produce €180 million in combined costs per year by 2022 and potential long-term revenues of more than €1.5 billion annually.

The transaction will allow Infineon to improve its financial standing as well as boost its presence in North America and the Japanese markets. It will also enable the company to expand its product portfolio as it eyes potential growth in the automotive, industrial and internet of things sectors, Infineon CEO Reinhard Ploss said.

Deal completion is expected by the end of calendar 2019 or early 2020, subject to approval by Cypress shareholders and regulatory authorities, as well as other customary conditions. While the deal is still in progress, Cypress will continue with its previously announced cash dividend of 11 U.S. cents per share, which are payable to shareholders July 18.