Wolfspeed takeover by Infineon hit by US objections

February 09, 2017 //By Christoph Hammerschmidt
The planned acquisition of power devices manufacturer Wolfspeed by Infineon is in danger of being called off. According to a press release from Wolfspeed parent company Cree, Inc., the US Committee on Foreign Investment in the United States (CFIUS) has raised objections against the acquisition. Now the parties involved believe the transaction in its current form is unlikely to be approved. 

According to several media publications here, the US authorities assess the planned takeover as a risk to the national security of the United States. In 2016, Infineon agreed with Cree on a takeover. With the move, Infineon intended to add valuable expertise in the technology of compound semiconductors. Such semiconductors, namely silicon carbide (SiC) are regarded as a major technological improvement in the markets of electromobility. SiC power transistors could help to make DC/DC converters for electric powertrains and for the charging infrastructure smaller and more efficient.

The price for the takeover would be €795 million ($850 million). The new assessment from the US authorities creates a “substantial risk” that the transaction would not be feasible in the form planned. Cree added that both partners are now considering a “modified transaction”. Infineon said it will continue to closely cooperate with CFIUS to find a solution.

This is already the second time that US authorities intervene in a planned transaction in the semiconductor market. Past December, the then Obama-led US administration prohibited the acquisition of semiconductor equipment manufacturer Aixtron by a China-controlled investor.