Infineon Sells Its Wireline Business
Infineon claims the unit has a market-leading 20 percent share of the global wireline chipset sector.
About 900 staff (600 WLC workers and 300 Infineon central function employees) will transfer to the standalone business, which is set to retain all its facilities and locations. The new owners will also get 800 patent families from Infineon.
The deal signals a relatively swift exit from the DSL customer premises equipment market for Infineon -- it acquired that particular subset of its business from Texas Instruments Inc. (NYSE: TXN) in June 2007. (See Infineon Buys TI Unit and Infineon DSL: Past & Future.)
Infineon CEO Peter Bauer stated in the company's official statement that the sale is "an important step in our overall refinancing process." The company is in the midst of a financial restructuring process, and recently raised €180 million from the debt markets. News of the deal, which is set to be completed in "autumn 2009," sent Infineon's share price soaring by more than 13 percent in early morning trading on Europe's XETRA exchange, but it settled at €2.67, up 8.5 percent, by early afternoon.
Infineon says it will now focus on its remaining four units: Wireless Solutions (for mobile network infrastructure and devices); Automotive; Industrial & Multimarket; and Chipcard & Security.
The sale of Infineon's business isn't the only M&A action in the DSL chip sector recently: In April Ikanos Communications Inc. (Nasdaq: IKAN) announced the acquisition of Conexant Systems Inc. (Nasdaq: CNXT)'s DSL business for $54 million ($75 million). (See Ikanos Reaches for DSL Breadth.)
In addition to Ikanos, the other main DSL chip vendor is Broadcom Corp. (Nasdaq: BRCM). (See Broadcom Expands on VDSL2 and Broadcom Works Broadband.)
— Ray Le Maistre, International News Editor, Light Reading