Stefan Mileschin

Infineon on Monday said that it had signed an agreement to take over Cypress Semiconductor, strengthening its portfolio of physical interface technologies. The move will add a set of technologies and expertise needed for numerous emerging sectors, including self-driving automotive, industrial, and Internet of Things. Infineon is set to pay $10 billion.

Known primarily for its vast set of offerings for automotive, wireless, security, power, and sensor industries, Infineon needs additional IP for modern applications, which include everything from watches to vehicles and aircrafts. Cypress appears to have this IP (and a lot more, which includes software/firmware) and this is where synergies between the two companies start to kick off. Meanwhile, it is necessary to note that there are many areas where two companies overlap, so expect optimizations here. Structurally, though, Infineon is going to get a lot stronger particularly on high-growth emerging markets.

Officially, Infineon mentions applications like electric drives, battery-powered devices, and power supplies as reasons for the takeover. Yet there is more than that. The combination of Infineon and Cypress looks to be significantly higher than the sum of all parts because it allows Infineon to build platforms for a variety of emerging platforms across many industries.

Under the terms of the contract, Infineon will offer $23.85 in cash for all outstanding shares of Cypress, which corresponds to an enterprise value for Cypress of €9.0 billion (over $10 billion), which represents a 46% premium to Cypress’s unaffected 30-day volume-weighted average price during a recent 30-date period.

https://www.anandtech.com/show/14482...10-billion-usd