Cree, the German chip maker, has agreed to buy Infineon Technologies's Wolfspeed, the North Carolina-based company, for $850m in cash. Infineon said the acquisition will strengthen its positions as a supplier of power solutions in high-growth markets such as electric cars, renewable energy and next-gen cellular infrastructure for IoT. Its margin and adjusted earnings per share will be immediately boosted. The acquisition will be funded by $720m in bank financing and $130m in existing cash. Despite reducing short-term profit, the deal will increase free cash flow for Infineon Technologies and speed its "transition to a more focused LED lighting company".
Infineon Technologies, the German chip maker, has agreed to buy Cree's Wolfspeed, the North Carolina-based company, for $850m in cash. Infineon said the acquisition will strengthen its positions as a supplier of power solutions in high-growth markets such as electric cars, renewable energy and next-gen cellular infrastructure for IoT. Its margin and adjusted earnings per share will be immediately boosted. The acquisition will be funded by $720m in bank financing and $130m in existing cash. Despite reducing short-term profit, the deal will increase free cash flow for Cree and speed its "transition to a more focused LED lighting company".