March 7 (UPI) — U.S. national security officials have advised the president to block Infineon’s bid for Cypress Semiconductor, according tomedia reports. U.S. government officials are concerned that Infineon’s acquisition of Tsipras poses a national security risk, according to people familiar with the matter.
Infineon, the German semiconductor maker, had tried to negotiate a deal with the US government to allow the deal to move forward, but failed to reach an agreement, one of the people said.
In June last year, Infineon and Cypress announced that they had signed a final agreement to buy Cypress for $23.85 a share in cash, with a total business value of 9 billion euros ($10.16 billion).
Infineon said last year that with Cypress’s strong research and development capabilities and importance to the U.S. market, Infineon will not only enhance its ability to serve key customers in North America, but also enhance its capabilities in other important regions. The company’s research and development division will have a place in Silicon Valley and expand its presence and market share in key strategic markets in Japan.
At the same time, Infineon hopes to make the company’s business model more resilient by achieving huge economies of scale. Based on fiscal 2018 revenues of 10 billion euros, the deal will make Infineon the world’s eighth-largest chipmaker. Based on the original power semiconductors and safety controllers, Infineon will become an important chip supplier in the automotive electronics market.
Cypress provides embedded solutions for automotive, industrial, smart home appliances, consumer electronics and medical products worldwide. Cypress’ microcontrollers, wireless and USB connectivity solutions, analog ICs, and reliable and high-performance flash memory help engineers design differentiated products and apply them on the market.
Infineon said the strong complementarities in the technology portfolio will further expand the company’s market potential in high-growth markets such as automotive, industry and the Internet of Things. The company last year estimated that the deal would generate an annual cost synergy of 180 million euros by 2022;
At Friday’s close, Cypress Semiconductor’s shares were down 14.65 percent at $16.37, giving it a market capitalization of about $6.117 billion.