EETimes.com – Intel, Infineon close to billion-dollar deal, says report

EETimes.com – Intel, Infineon close to billion-dollar deal, says report.

LONDON — Intel and Infineon are closing in on a deal to sell Infineon’s wireless business unit to Intel for a price of more than $1 billion, according to a report in Die Welt. Discussions are said to have taken place this week in Munich with the focus being finding a price for the deal, the report said citing un-named sources. Rumors that Infineon is looking to sell its wireless business unit have been running for several weeks (see Infineon asks bank to aid wireless sale, says report). The unit has several prestigious design wins in Apple products such as the iPhone and the iPad as well as supplying Nokia and Samsung, but conventional business wisdom is that unless business units are held for strategic reasons companies should shed those that are not competing in a top-three position globally. Meanwhile it makes sense for Intel to take a position in wireless to complement its microprocessor sales for mobile applications. The two companies have met several times to negotiate over the last two weeks with the price of the mobile division estimated to be between $1.1 billion and $1.4 billion, the report said. U.S. investment bank JP Morgan is taking the lead in the negotiations with law firms Gleiss Lutz and Freshfields now also involved. It is at the offices of Gleiss Lutz in Munich that the latest negotiations are said to have taken place, the report said. Communications has been an Infineon technology strength for many years and the company has achieved design wins inside Apple’s iPhone and iPad. However, the wireless marketplace is crowded and Infineon is smaller than Qualcomm, Texas Instruments and ST-Ericsson. This may have prompted Infineon to leave the market so it can focus on automotive and power semiconductors. Infineon has already divested its wireline communications IC business via a management buyout into a company called Lantiq. The wireless division is now responsible for about one quarter of Infineon’s sales revenue

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