Infineon Revs Up Auto Business With $10 Billion Cypress Deal

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  • 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.

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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.

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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.

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