FILE PHOTO: The logo of semiconductor manufacturer Infineon is seen at its Austrian headquarters in Villach, Austria, June 3, 2018. REUTERS/Lisi Niesner/File Photo
FRANKFURT (Reuters) – Infineon has agreed to buy Cypress Semiconductors in a deal valuing the U.S. maker of microchips used in cars and electronic devices at 9 billion euros ($10.1 billion), including debt, the German company said on Monday.
The cash offer of $23.85 per share represents a 46% premium to Cypress’ share price over the last month, the German maker of power-management chips used in cars, smartphones and wind turbines said.
“With the addition of Cypress, Infineon will consequently strengthen its focus on structural growth drivers and serve a broader range of applications,” it added.
Infineon shares were indicated to drop 2%.
The acquisition will reap cost synergies of 180 million euros per year by 2022 and revenue synergies of more than 1.5 billion euros in the long term, Infineon said.
Once Cypress Semiconductors has been integrated, Infineon targets through-cycle revenue growth of 9% or more and a segment result margin of 19 percent. The investment-to-sales ratio is targeted to decrease to 13 percent.
The Germany chipmaker added that it intends to finance about 30% of total transaction value with equity and remainder with debt as well as cash on hand.
The Board of Directors of Cypress and the Infineon Supervisory Board have already consented to the acquisition, which is expected to close in late 2019 or in early 2020.
Reporting by Arno Schuetze; Editing by Riham Alkousaa and Stephen Coates