Infineon Technologies, agreed to acquire International Rectifier Corp. for around $3 billion in cash, extending its power-management technology venture.
The largest semiconductor maker in Germany will part with $40 per share International Rectifier, which is based in El Segundo, California, in an arrangement approved by the boards of both companies, Infineon said in a statement on Wednesday. The price is 51% higher than its closing on Tuesday.
The acquisition is the biggest the Neubiberg, Germany-based firm has seen through, according to estimates by Bloomberg. If it’s approved by regulators, the deal will be concluded by early 2015.
CEO Reinhard Ploss, who has been after a deal since taking office in 2010, is basing optimism on surging demand for chips such as those deployed in car electronics and to control battery power in mobile gadgets.
The purchase also brings closer the firm to the technology center of Silicon Valley.
“It is very important for us to be in the U.S. and close to the highly innovative region of California,†Ploss is quoted by Bloomberg as saying.
International Rectifier manufactures chips that facilitate the management of power flow in devices such as satellites, cars and planes. The firm posted a 13% hike in revenue to $1.11 billion for the year ending June and bounced back to a profit of $58.7 million after registering a loss of $88.8 million the previous year. Its stock climbed 47% to trade at $39.07 as of 2:17 in New York.
“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,â€Â the Wall Street Journal quotes Ploss as stating.
Semiconductor stocks jumped in New York earlier today after reports of the nearing Infineon takeover emerged. Fairchild Semiconductor International Inc. soared as much as 8.8%.
To contact the reporter of the story: Yashu Gola at yashu@forexminute.com
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