Cree, Inc. (NASDAQ: CREE) and German-based Infineon Technologies revealed Thursday that they struck a definitive agreement enabling the German firm to acquire the Wolfspeed Power and RF division of Cree for $850 million cash. According to the firms, the deal included the related SiC wafer substrate business for power and RF power.
Cree said its Board of Directors, as well as Infineon's Supervisory Board have approved the transaction. Both the companies expect the closing of the transaction to happen before the end of the current year, subject to regulatory approvals.
Infineon said the acquisition will allow them to offer the widest offering in compound semiconductors and would further strengthen it as a leading supplier of power and RF power solutions in high-growth markets. That included electro-mobility, renewables and next-generation cellular infrastructure pertinent for IoT. The company expects the transaction to be financed by incremental debt of $720 million and $130 million cash-on-hand.
Cree Chairman and CEO, Chuck Swoboda, said, "After much consideration and due diligence over the past year, we concluded that selling Wolfspeed to Infineon was the best decision for our shareholders, employees and customers. We believe that Wolfspeed will now be able to more aggressively commercialize its unique silicon carbide and gallium nitride technology as part of Infineon."
Shares of Cree traded 8.77 percent higher in the pre-market on Thursday.
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