Infineon Technologies AG is set to acquire International Rectifier Corporation in a deal that is set to value the US company at $3bn. The acquisition will combine two leading semiconductor companies with strong market shares in power management technology. According to Infineon the acquisition of International Rectifier will complement its offerings and will enable it to provide customers with a much broader range of products and services. Infineon will also benefit significantly from greater economies of scale as well as a larger regional footprint.
Commenting Dr. Reinhard Ploss, CEO of Infineon Technologies AG, said, “The acquisition of International Rectifier is a unique opportunity. With their great knowledge of specific customer needs and their application understanding, International Rectifier employees will contribute to Infineon’s strategic development from product thinking to system understanding and system solutions. The combination of Infineon’s and International Rectifier’s products, technological and innovative excellence, as well as distributional strength will unleash great potential.”
Oleg Khaykin, President and CEO of International Rectifier, responded saying, “This transaction provides significant value to our stockholders and opens new strategic opportunities for both our customers and employees. By combining two complementary providers in power management solutions, International Rectifier will benefit from Infineon’s products and technologies, manufacturing and operational excellence and greater R&D scale.”
The International Rectifier Board of Directors and Infineon’s Supervisory Board have approved the transaction. The closing of the transaction is subject to regulatory approvals in various jurisdictions and customary closing conditions, as well as approval of International Rectifier stockholders. The transaction is expected to close late in the calendar year 2014 or early in the calendar year 2015 subject to regulatory approval.
Synergies are expected to drive significant accretion going forward, building on International Rectifier’s existing successful operational restructuring.
Infineon’s and International Rectifier’s product portfolios are highly complementary. International Rectifier’s expertise in low-power, energy-efficient IGBTs and Intelligent Power Modules, Power MOSFETs and Digital Power Management ICs will be integrated with Infineon’s offering in power devices and modules.
With International Rectifier, Infineon acquires an advanced manufacturer in Gallium Nitride on Silicon (GaN) based power semiconductors. This combination will accelerate and solidify Infineon’s position in GaN discretes and GaN system solutions, improving its ability to pursue this strategically important technology platform with significant future growth potential.
The transaction will result in a broad range of products creating a comprehensive provider in the market for silicon-, silicon-carbide- and gallium-nitride-based power devices and integrated circuits (ICs).
The integration of International Rectifier is intended to generate economies of scale through the optimisation of the combined entity’s operating expense structure and through the acceleration of the ramp-up of Infineon’s leading 300-millimeter thin wafer manufacturing capability.
Infineon will also have a much broader and stronger regional scope. International Rectifier has a strong presence in the US, the important center of innovation especially in the Connected World, and will also help to improve Infineon’s position in Asia. The increase in exposure to the distribution channel will allow Infineon to meet the needs of a broader range of customers.