GERMAN SEMICONDUCTOR OUTFIT Infineon has agreed a $9bn deal to buy Cypress Semiconductor.
Cypress is a memory chip maker specialising in NOR flash memories, F-RAM and SRAM Traveo microcontrollers, as well as software and connectivity components, but has recently shifted its focus to the vehicle and connected devices market and recently withdrew from the NAND flash business.
Infineon CEO Reinhard Ploss, meanwhile, justified the deal in terms of the anticipated growth in the market for IoT and other connected devices.
"With this transaction, we will be able to offer our customers the most comprehensive portfolio for linking the real with the digital world. This will open up additional growth potential in the automotive, industrial and Internet of Things sectors," said Ploss in a statement on Monday.
"Jointly, we will enable more secure, seamless connections, and provide more complete hardware and software sets to strengthen our customers' products and technologies in their end markets," added Cypress CEO Hassane El-Khoury.
The acquisition will enable Infineon to offer more comprehensive solutions for electric drives, battery-powered devices and power supplies.
"The combination of Infineon's security expertise and Cypress's connectivity know-how will accelerate entry into new IoT applications in the industrial and consumer segments," the statement continued.
"In automotive semiconductors, the expanded portfolio of microcontrollers and NOR flash memories will offer great potential, especially in light of their growing importance for advanced driver assistance systems and new electronic architectures in vehicles."
The combined company will have pro forma revenues of €10bn in 2018, making it the eighth largest semiconductor company in the world.
Infineon's $23.85 per share offer marks a 46 per cent premium over Cypress's average stock price over the previous month, although the company's stock price increased strongly last week on the back of press reports that the company was considering a merger. µ
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