By GEIR MOULSON - Associated Press Writer - Associated Press
Monday, August 30, 2010
German chipmaker Infineon Technologies AG is selling a unit that makes products for wireless telephones to California's Intel Corp. in a $1.4 billion cash deal, the companies said Monday.
Germany's Infineon said the sale of the wireless solutions, or WLS, unit would allow it to focus on its core business. Intel said the acquisition would strengthen its hand in Internet connectivity.
WLS will operate as a standalone business, the companies said in a joint statement. The deal, which still requires regulatory approval, is expected to close in the first quarter of 2011.
The acquired technology will be used in Intel Core processor-based laptops and other devices including smartphones, netbooks, tablets and embedded computers.
The deal came weeks after an Aug. 2 announcement by Infineon that it was "in discussions with interested parties about a transaction" involving WLS.
"We can now fully concentrate our resources towards strong growth in our core segments," the automotive, industrial and chip card and security divisions, Infineon chief executive Peter Bauer said. "We all stand to benefit enormously from this deal."
"The global demand for wireless solutions continues to grow at an extraordinary rate," Intel president and CEO Paul Otellini said.
"As more devices compute and connect to the Internet, we are committed to making certain that Intel is well positioned to take advantage of the growth potential in every computing segment, from laptops to handhelds," he added.
WLS had annual revenue of €917 million in the last financial year, which ended last September — about 30 percent of Infineon's total of just over €3 billion.
Shares of Infineon, based in Neubiberg, were 0.2 percent lower at €4.60 ($5.87) in early Frankfurt trading. Intel is based in Santa Clara, California.
