Infineon Technologies AG of Munich, Germany has completed its acquisition (announced on 20 August) of International Rectifier Corp (IR) of El Segundo, CA, USA, following the approval of all necessary regulatory authorities and International Rectifier’s shareholders. The deal is worth about $3bn (with Infineon paying $40 per outstanding share of International Rectifier).
Infineon (which has about 29,800 staff) had sales of Euro 4.3bn in fiscal 2014 (to end-September). Power management technology provider International Rectifier (which has 4200 staff) reported revenue of $1.1bn for fiscal 2014 (ending 29 June).
“The acquisition of International Rectifier is an important step for Infineon to foster our position as a global market leader in power semiconductors,” says Infineon’s CEO Dr Reinhard Ploss. “The acquisition helps us to accelerate our strategic approach ‘from product thinking to system understanding’.”
The combined company is led by Reinhard Ploss (CEO), Arunjai Mittal (member of the Management Board Regions, Sales, Marketing, Strategy Development and M&A) and Dominik Asam (chief financial officer). President of International Rectifier and of Infineon North America is Robert LeFort.
Infineon reckons that International Rectifier is highly complementary to its business, with the combined firm gaining greater scope in product portfolio and regions, especially with small and medium enterprise customers in the USA and Asia. Also, tapping additional systems know-how in power management, the firm reckons that the merger expands its expertise in power semiconductors, combining knowledge in compound semiconductors, specifically gallium nitride (GaN). Furthermore, the acquisition should drive greater economies of scale in production, strengthening the competitiveness of the combined company.
The acquisition is expected to be accretive to pro-forma earnings per share (EPS) already in Infineon’s current fiscal year. Synergies should further drive significant accretion, building on International Rectifier’s existing operational restructuring. At the latest within fiscal 2017, International Rectifier’s margin contribution is expected to be at least in line with Infineon’s target of 15% segment result margin over the cycle.
