Status Update: Withdrawn and Abandoned
Acquirer: Infineon Technologies AG (Germany)
Acquired: Cree, Inc. (US)
Value: US$850 million
Industry: Semiconductors
UPDATE: On February 16, 2017, Cree Inc., announced that “it will terminate the definitive agreement to sell its Wolfspeed Power and RF division (“Wolfspeed”), which includes the silicon carbide substrate business for power, RF and gemstone applications, to Infineon Technologies AG.” (Cree Inc., Press Release, Ex-99.1, Form 8-K, Feb. 16, 2017, SEC Filing.) According to the Press Release, “Cree and Infineon have been unable to identify alternatives which would address the national security concerns of the Committee on Foreign Investment in the United States (CFIUS), and as a result, the proposed transaction will be terminated.” (Id.) “The termination of this transaction with Infineon will trigger a termination fee of $12.5 million being paid to Cree. As a result of the transaction termination and Cree’s decision to focus on running the Wolfspeed business, Wolfspeed will now be reported as a separate segment of Cree’s continuing operations.” (Id.)
Updated on February 9, 2016:
Status: Potential Mitigation or Withdrawal
On February 8, 2017, Cree, Inc. reported that, in regards to the planned sale of Cree, Inc.’s, Wolfspeed business to Infineon Technologies AG, based on “recent communications with the Committee on Foreign Investment in the United States (CFIUS), the parties believe the transaction in its current form is not likely to be approved by CFIUS.” (Cree Press Release, Ex-99.1, Form 8-K, Feb. 8, 2017, SEC Filing.) Cree further stated that “[t]he parties are exploring whether there are alternatives to modify the transaction to mitigate or address the regulatory concerns, which if agreed by the parties, would involve a refiling with CFIUS.” (Id.)
Updated on December 7, 2016:
Status: New Filing
As previously covered on this blog, Cree, Inc., reached an agreement to sell its Wolfspeed business to Infineon Technologies AG in July 2016. According to a regulatory filing by Cree, the “parties have submitted their CFIUS filing . . . and expect the statutory CFIUS review period to commence in the near term.” (See Cree Form 8-K, Nov. 23, 2016, SEC Filing.) The parties expect the transaction to close in February 2017. (See id.)
Posted on October 28, 2016:
Status: Upcoming/New Filing
On July 13, 2016, Infineon Technologies AG, a semiconductor manufacturer based in Germany, and Cree, Inc. (Nasdaq: CREE), a US based manufacturer of LED products and semiconductors, executed an asset purchase agreement whereby Infineon will acquire the Wolfspeed Power and RF division (“Wolfspeed”) of Cree and the related silicon carbide (SiC) wafer substrate business for power and RF power. (see Joint Infineon and Cree press release, July 14, 2016). According to Cree SEC filings, the transaction is conditioned on approval by CFIUS. (See Cree SEC Form 8-K, July 14, 2016; Cree SEC Form 10Q, October 19). On October 18, 2016, Cree disclosed that the parties received a second request from the federal trade commission regarding the transaction, but only disclosed that the parties were “continuing to work together to obtain” CFIUS approval. (See Cree SEC Form 8-K, Ex. 99.1, Oct. 18, 2016.)
The purchase price for this planned all-cash transaction is US$850 million. The transaction is expected to close by the end of 2016, and is subject to clearance by CFIUS among other regulatory requirements and closing conditions. The acquisition of Cree’s business includes capabilities in semiconductor compounds SiC, gallium nitride on silicon (GaN-on-Si), and gallium nitride on silicon carbide (GaN-on-SiC). (For the preceding sentences, see Joint Press Release, July 14, 2016; Cree SEC Form 10Q.) Frank Plastina, CEO of Wolfspeed, issued a statement that the acquisition will give the Wolfspeed business “the advantages of a global company in our sector, including the ability to leverage Infineon’s market reach and infrastructure.” (See Joint Press Release.) Additional coverage of the transaction can be found in this Forbes, July 15, 2016 article, and Bloomberg’s article dated July 14, 2016.
