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Infineon Raises $1.7 Billion in Capital to Fund Its Cypress Deal

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Infineon raises capital

German chip maker Infineon Technologies has reportedly raised 1.55 billion euros (~$1.74 billion) in capital by selling its shares to fund its acquisition of Cypress Semiconductor (CY). Infineon has sold ~113 million new shares at 13.70 euros each through private placements to institutional investors, according to a statement released on June 18. The transaction will increase its share capital by 10%.

Infineon closed 1.05% higher at 15.65 euros on June 18. Cypress was up 0.7% at $22.18 on the same day. Cypress stock has gained 29.1% year-to-date as of June 18 compared to the S&P 500, which is up nearly 16.1% in the same period.

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Deal financing

On June 3, Infineon, a maker of power chips used in cars, server farms, smartphones, and more, agreed to buy US rival Cypress Semiconductor for more than $10 billion (9 billion euros) as it made efforts to expand in the high-growth automotive, industrial, and Internet-of-Things sectors. The deal could help Infineon become the top supplier of automotive chips.

Infineon had planned to buy Cypress, a manufacturer of flash memory chips and microcontrollers, with equity, debt, and cash. Infineon will finance ~30% of the deal’s value with equity and the remainder with debt as well as cash in hand.

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