Infineon, a German semiconductor company, has announced that it will take over the Californian company Cypress Semiconductor Corporation. The transaction price will be $10,1 billion, or $23,85 per share, implying a 46% premium over last month's average Cypress stock price.
The week ending May 31st had in fact been archived by Cypress with a value of 17,82 dollars per share and a capitalization of 6,5 billion dollars compared to the 17,2 billion capitalization of Infineon
According to Infineon's expectations, from this acquisition the company will benefit from synergies equal to 180 million euros a year thanks to the merger, with an increase in turnover that will reach 1,5 billion euros a year when fully operational. The CEO Reinhard Ploss spoke of “a key step in Infineon's strategic development, it will strengthen and accelerate our profitable growth and place our business on a broader footing”.
The deal is expected to close by the end of this year or early 2020 based on the go-ahead from Cypress shareholders and antitrust authorities.
Hassane El-Khoury, chief executive officer of Cypress, added, “The Cypress team is excited to join forces with Infineon to leverage the multi-billion dollar opportunities arising from the massively increased connectivity and computing requirements of the next wave of technology.” After the integration, Infineon expects to achieve revenue growth of more than 9% and a margin of 19%, as well as reduce the capex-to-sales ratio to 13%.
On the Stock Exchange Frankfurt, after the announcement, Infineon dropped 5,5% to 15,2 euros.
