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(Bloomberg) – Infineon Technologies AG is on the verge of acquiring Cypress Semiconductor Corp., sources close to the record said.
The companies could announce an agreement assessing Cypress Semi to nearly $ 10 billion, including debt, as early as Monday, said the population, who had asked not to be identified as part of the confidential data. Infineon will pay between $ 23 and $ 24 per share for Cypress Semi, two people announced, a premium premium of more than 50% over the course of the action, before Bloomberg announced last week that the maker of chips was considering a sale after receiving a takeover.
Shares of Cypress Semi closed at $ 17.82 on Friday, giving the company a market value of $ 6.5 billion.
A representative of Cypress Semi, based in San Jose, declined to comment. A representative of Infineon, based in Neubiberg, Germany, did not immediately respond to a request for comment.
Infineon, with a market value of 18.2 billion euros ($ 20 billion), has been largely ignored over the last five years, with the semiconductor industry restructured following negotiations. In 2017, it ended an agreement to acquire the Wolfspeed Power LED unit and lighting manufacturer Cree Inc. after a national security review in the United States.
Infineon shares have lost nearly one-third of their value over the past year. The chip maker has twice revised its forecasts to face the uncertainties of the global economy and slowing car sales in China.
Cypress Semi designs and manufactures flash memory chips and microcontrollers, or chips used to power small electronics.
The company is trying to convert itself as a supplier of vehicle chips and the booming market of the so-called Internet of Things, the incentive for the electronics industry to connect peripherals. He told investors he was expecting 8% to 12% growth in his auto business over the next five years and an expansion of his IoT unit up to 14% over this period.
The annual business figure, helped by an acquisition, has more than doubled in five years to reach $ 2.5 billion in 2018. Analysts predict that sales growth will disappear this year, anticipating a contraction in sales. 39, about 11%, according to the average analyst estimates based on the data compiled by Bloomberg.
What Bloomberg Intelligence says
Infineon's plans to acquire Cypress could lead to difficult integration work, with the buyer focused on power chips and the target on the Internet of Things and specialized memory. Infineon makes about a quarter of its sales in China, which has become a headwind to the slowdown in the economy. It will need stronger sales on 2H to meet its forecasts of 8 billion euros.
– Anand Srinivasan and Johnathan Ritucci, Analysts – Click here to read the search
(Updates with details on Cypress Semi Business in the eighth paragraph.)
To contact the reporters on this story: Liana Baker in New York at [email protected], Ian King in San Francisco at [email protected], Ed Hammond in New York at [email protected]
To contact the editors in charge of this story: Elizabeth Fournier at [email protected], Jillian Ward at [email protected], Fion Li
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