Infineon acquires Cypress Semiconductor

Munich, Germany, 16 April 2020 -- Infineon Technologies (FSE: IFX/OTCQX: IFNNY) today announced the completion of its acquisition of Cypress Semiconductor. As of the closing, the SAN Jose-based company has become part of Infineon.

"The acquisition of Cypress is a landmark step in Infineon's strategic development," said Reinhard Ploss, Infineon's chief executive officer. "Together, we offer our customers the industry's most comprehensive portfolio of products to connect the real world with the digital world and shape digitization, one of the most important global trends. We are a trusted partner for customers and distributors as we evolve from a component leader to a system solutions leader for the automotive, industrial and Internet of Things markets. In addition, customers can benefit from our expanding global reach and enhanced design support tailored to their needs. We welcome our new colleagues from Cypress to Infineon."

The addition of Cypress further strengthens Infineon's focus on structural growth drivers and broader applications. This will accelerate the company's path to profitable growth. Cypress adds a distinctive portfolio of microcontrollers, connectivity components, software ecosystems and high-performance memory. All are highly complementary to Infineon's leading power semiconductors, automotive microcontrollers, sensors and safety solutions. Combined with these technology assets, it provides advanced solutions for high-growth applications such as ADAS/AD, IoT and 5G mobile infrastructure. The strong research and development capabilities of Cypress and its foothold in the US and Japan further strengthen Infineon's connection with customers around the world

The financial basis for the merger was confirmed

On June 3, 2019, Infineon and Cypress announced that the two companies have signed a definitive agreement under which Infineon will acquire Cypress for $23.85 per share in cash, representing an enterprise value of €9 billion. The transaction has been approved by Cypress shareholders and has received all necessary regulatory clearances.

The acquisition is expected to be accretive to revenue in fiscal 2021. Profitability is expected to improve, while the combined business will have a lower capital intensity, resulting in increased free cash flow. We expect annual cost synergies of €180m within approximately three years of completion. The complementary product portfolio will be able to deliver more chip solutions, and in the long run they could generate revenue synergy potential of more than €1.5 billion per year.

The acquisition makes Infineon one of the world's top 10 semiconductor manufacturers. Already a leader in power semiconductors and safety controllers, Infineon is now becoming the number one supplier of semiconductors to the automotive industry.

Stable long-term financing structure