- The deal would create an automotive leader with a 13 per cent market share
- This would enable Infineon to offer more complete packages for electric vehicles that are expected to win a growing share of the car market
Germany’s Infineon has agreed to buy Silicon Valley-based Cypress Semiconductor for $10 billion, in an expensive move by Europe’s largest chip-maker to expand further in next-generation automobiles and internet technologies.
Investors swiftly gave the deal a thumbs-down on concerns that Infineon was paying a heavy price just as the chip business was weakening, pushing its shares 9 per cent lower on Monday.
New player in the block
The deal would create an automotive leader with a 13 per cent market share, coupling Infineon’s prowess in managing electric drivetrains with Cypress’s superior connectivity in areas such as in-car entertainment.
That would enable the combined company to offer more complete packages for electric vehicles that are expected to win a growing share of the car market as governments clamp down on emissions from petrol- and diesel-powered vehicles.
The cash offer of $23.85 per share represents a 46 per cent premium to Cypress’ share price over the last month, the Munich-based maker of power-management chips said to Reuters.
