German chipmaker Infineon to buy Wolfspeed Power for $850 mn

German chipmaker Infineon Technologies yesterday struck a deal to buy Wolfspeed Power and RF from US company Cree, Inc for €740 million ($850 million) in cash.

The deal also includes Cree's related semiconductor material business.

The deal comes 18 months after Infineon purchased power management company International Rectifier for about $3 billion, its biggest acquisition to date. (See: German chipmaker Infineon to acquire International Rectifier for $3 bn) The business to be acquired generated pro-forma revenues of $173 million in the twelve months ending 27 March 2016.

Infineon will fund the transaction with bank financing of $720 million and $130 million cash-on-hand.

The acquisition will enable Infineon to expand its offering in power solutions in high-growth markets such as electric cars, renewable energy and next-generation cellular infrastructure relevant for so-called Internet of Things, Munich-based Infineon said in a statement.

Wolfspeed, based in North Carolina, has been a part of Cree for almost three decades. It is a provider of SiC-based power and GaN-on-SiC-based RF power solutions.

It has more than 550 employees and an IP portfolio of approximately 2,000 patents and patent applications.

Dr. Reinhard Ploss, CEO of Infineon, said, ''Wolfspeed's and Infineon's businesses and expertise are highly complementary, bringing together industry leading experts for compound semiconductors. This will enable us to create additional value for our customers with the broadest and deepest portfolio of innovative technologies and products in compound semiconductors available in the market.

Chuck Swoboda, Cree chairman and CEO, said, ''After much consideration and due diligence over the past year, we concluded that selling Wolfspeed to Infineon was the best decision for our shareholders, employees and customers. We believe that Wolfspeed will now be able to more aggressively commercialize its unique silicon carbide and gallium nitride technology as part of Infineon.''

Frankfurt Stock Exchange-listed Infineon, whose chips power car airbags, enable cruise control, manage power supplies and cut vehicle emissions, had rebuffed major takeovers after it was spun off from engineering conglomerate Siemens in 1999.

The company later struggled to turn around its failing memory-chip business, which it then disposed of.

Infineon employs 35,400 people worldwide and generates annual sales of about €5.8 billion.