News

# Infineon Acquisition of Cypress Cleared to Proceed by U.S. Authorities

March 09, 2020 by Paul Shepard

On 9 March 2020, the Committee on Foreign Investment in the United States (CFIUS) concluded its review under Section 721 of the Defense Production Act of 1950, of the planned acquisition of Cypress Semiconductor Corporation as announced by Infineon Technologies AG on 3 June 2019. CFIUS cleared the transaction. The closing of the Merger remains subject to approval from China’s State Administration for Market Regulation (SAMR) and other customary closing conditions under the merger agreement.

In June, 2020, Infineon and Cypress signed a definitive agreement under which Infineon will acquire Cypress for US$23.85 per share in cash, corresponding to an enterprise value of €9.0 billion. At the time of the initial announcement, Reinhard Ploss, Infineon's CEO called the acquisition a "landmark step in Infineon's strategic development. We will be able to offer our customers the most comprehensive portfolio for linking the real with the digital world." "We will strengthen and accelerate our profitable growth and put our business on a broader basis. With this transaction. This will open up additional growth potential in the automotive, industrial and Internet of Things sectors. This transaction also makes our business model even more resilient. We look forward to welcoming our new colleagues from Cypress to Infineon. Together, we will continue our shared commitments to innovation and focused R&D investments to accelerate technology advancements," Ploss added. #### Transaction summary • Combination of highly complementary technology portfolios opens up great potential in high-growth target markets automotive, industrial and Internet of Things (IoT) • Infineon to pay US$23.85 per Cypress share, equivalent to a total enterprise value of €9.0 billion
• Transaction expected to yield €180 million in cost synergies per annum by 2022 and more than €1.5 billion annual revenue synergies in the long-term
• Transaction expected to be accretive to earnings beginning in the first full year after closing and to close by end of calendar year 2019 or early 2020
• Future target operating model after integration: 9+ percent revenue growth, 19 percent segment result margin and 13 percent investment-to-sales ratio