Infineon Technologies AG and Cypress Semiconductor Inc. announced today that they have signed a definitive agreement under which Infineon will acquire Cypress for $23.85 per share in cash, representing a total enterprise value of €9 billion ($10 billion).
Our highly complementary technological strengths will further expand our market potential in high-growth markets such as automotive, industrial and the Internet of Things.
Infineon will buy Cypress for $23.85 per share, for a total value of 9 billion euros.
The acquisition will generate annual cost synergies of €180 million by the end of 2022; In the long term, annual earnings synergies will reach €1.5 billion.
The transaction is expected to close in late 2019 or early 2020; It is expected to be accretive to earnings in the first full fiscal year after closing.
Future target operating model after integration: 9% + revenue growth, 19% operating margin and 13% investment-to-sales ratio.
In automotive semiconductors, the expanded combination of microcontrollers and NOR flash will offer great potential, especially in advanced driver assistance systems and new electronic architectures in automobiles. Reinhard Ploss, Infineon's Chief Executive Officer, said: 'The planned acquisition of Cypress is an important step in Infineon's strategic development. We will strengthen and accelerate our profitable growth and operate on a broader basis.'
Infineon said that after the acquisition of Cypress, it will strengthen the core of driving structural growth and apply the company's technology to a wider range of areas. This will accelerate the strengthening of the company's profitable growth foundation in recent years. Cypress's differentiated portfolio of microcontrollers, software and connectivity components is highly complementary to Infineon's leading power semiconductors, sensors and security solutions. The combined technology assets of the two companies will provide more comprehensive and advanced solutions for high-growth applications such as electric motors, battery-powered devices and power supplies. Infineon's security expertise combined with Cypress's connectivity technology will accelerate the company's entry into new iot applications in both industrial and consumer markets.
'With this transaction, we will be able to offer our customers the most comprehensive portfolio of products that connect the real with the digital world.' This will bring additional growth potential to the automotive, industrial and iot segments. This transaction also makes our business model more resilient. We look forward to welcoming our new colleagues from Cypress to Infineon. We will continue to work together on innovation and focused R&D investments to accelerate technological progress. Infineon CEO Reinhard Ploss said.
Hassane El-Khoury, President and CEO of Cypress, said: 'The Cypress team is excited to partner with Infineon to capitalize on the multi-billion dollar opportunity presented by the massive increase in demand for connectivity and computing in the next wave of technology. This announcement is a testament not only to the strength of our team in delivering industry-leading solutions on a global scale, but also to what our two great companies can achieve together.' Together, we will enable more secure, seamless connectivity and provide a more complete set of hardware and software to strengthen our customers' products and technologies in the end market.' In addition, the strong fit between our two companies will lead to more opportunities for our customers and employees. '
Steve Albrecht, Chairman of the Board of Directors of Cypress, said: 'Over the past three years, our Cypress 3.0 strategy has delivered great results and restructured the entire organization to focus on important markets. After receiving interest from several companies, we made a deal that was a testament to the strategy and hard work of our team. For Cypress shareholders, the combination of a closing continuing dividend plus a $23.85 cash price represents significant value creation. The transaction will create product opportunities that are increasingly important in the highly competitive automotive, industrial and consumer markets. As members of the Board, we thank Cypress's outstanding management team, led by Hassane El-Khoury.'