Cypress Fails to Finalize Merger Agreement with ISSI

June 07, 2015 by Jeff Shepard

Integrated Silicon Solution, Inc. today announced that Cypress Semiconductor has failed to finalize a merger agreement by the deadline of June 7, 2015 imposed by Cypress, even after Cypress received the negotiated draft agreement from ISSI on Friday, June 5, 2015. As a result of ISSI's full cooperation, Cypress was able to complete extensive due diligence and hold numerous meetings with ISSI's management team. Also, a merger agreement has been nearly fully negotiated with the only remaining point of difference being the treatment of the antitrust risks of the transaction. ISSI filed an amendment to its proxy statement with the SEC on Friday, June 5, 2015 which further describes the due diligence process with Cypress and the deliberations of the ISSI board of directors.

While Cypress has repeatedly downplayed antitrust concerns in its press releases, ISSI believes a transaction with Cypress presents significant antitrust risks in both the U.S. and Germany. As such, ISSI believes a transaction with Cypress would be unlikely to close without substantial divestitures or other actions required by antitrust authorities. If Cypress had agreed to provide ISSI with protection against this antitrust risk, ISSI would have been in a position to finalize a merger agreement with Cypress this past weekend.

In a statement, ISSI indicated that it is disappointed that Cypress is not willing to agree to take all necessary actions to ensure receipt of antitrust clearance. Cypress has consistently downplayed the antitrust risks in its public statements. If Cypress truly believes that the transaction does not present significant antitrust concerns then it should be willing to provide the contractual commitment that the ISSI Board believes is in the best interests of its stockholders. By refusing to agree to the ISSI language, Cypress is placing ISSI's stockholders and the transaction closing at risk by creating an opportunity for Cypress to walk away from the deal if it does not receive a favorable antitrust decision.

ISSI has made it clear to Cypress that the objective of the ISSI Board is to obtain the highest price for ISSI stockholders consistent with its fiduciary duties under applicable law. Therefore, ISSI would be prepared to immediately move forward with an agreement in compliance with the Uphill merger agreement, if Cypress were to commit to ensure a successful closing for ISSI stockholders.