Infineon sells wireline communications business for $347M
The company says the wireline transaction "will significantly improve" its financial situation and allow it to focus its resources on its remaining four segments: automotive, industrial and multimarket, chipcard and security, and wireless solutions.
By Suzanne Deffree, Managing Editor, News -- EDN, July 8, 2009
Infineon Technologies AG has agreed to sell its wireline communications business to an affiliate of US-based investor Golden Gate Capital for about $347 million (250 million Euros).
The ink is drying on the sales contracts, which Infineon said were signed Tuesday, and the transaction is expected to close in fall of this year.
Infineon has not been immune to the current economic crisis. However, Infineon, like several other companies within the electronics industry, is beginning to show signs of possible recovery. In late June, the Germany-based company raised its quarterly sales estimate, calling for a sequential revenue increase by a low-teens percentage, up from its original 10% gain estimate. Moreover, the company said Tuesday the wireline transaction "will significantly improve" its financial situation.
"The divestiture of the [wireline communications] segment is an important step in our overall refinancing process," said Peter Bauer, CEO of Infineon, in a statement. "Furthermore, our stronger focus enables us to expand our leading technological position in the three key sectors energy efficiency, communications, and security. As the wireline communications segment is relatively independent from the working and production processes of the company as a whole, the carve-out will involve reasonable effort."
With the sale, Infineon will focus its resources on its remaining four segments: automotive, industrial and multimarket, chipcard and security, and wireless solutions. Infineon in 2006 spun out its memory operations to form Qimonda AG, the now suffering DRAM company that filed for insolvency in January.
Infineon said that all wireline products, locations, and development projects will be continued by the new Golden Gate Capital-owned company and noted that with the transaction around 800 patent families will be transferred.
Also with the transaction, employment contracts for approximately 600 wireline group employees will be transferred to the new company. An estimated 300 additional employees from Infineon central functions who already work on behalf of the wireline segment are also designated to join the new company.
