Business
Latest News
|NewsletterBusiness
Infineon NXP merger talk starts again
Tuesday 26 August 2008
The Infineon-NXP merger story was resurrected at the weekend with NXP saying that, although it is not currently in merger talks, it doesn’t rule out a merger.
When the Infineon supervisory board was trying to force out former Infineon CEO Dr Wolfgang Ziebart, last May, it circulated the story to the German press that Infineon would authorise a capital increase, issue more shares, and sell the newly created shares to KKR so giving KKR a 40-50% stake in Infineon. That was expected to have been followed by KKR selling NXP to Infineon.
The re-structuring process started in 2006 when NXP was bought by a consortium led Wall Street buy-out company Kohlberg Kravis and Roberts (KKR).
Recently a couple of deals saw NXP hive off its wireless operation to ST. In the first of these, NXP retained a 20% holding in the two companies’ joint wireless activities. In the second deal, NXP relinquished that 20%.
NXP is eating cash, having spent $830m of its cash reserves in the first six months of this year, and is loss-making, and its CEO, Frans van Houten, said at the weekend that NXP will announce a ‘substantial reorganisation’ to reduce costs.
KKR has already written down the value of its investment in NXP, and MarketAxess reports that NXP's 9.5% bond can be bought for 73.75 cents on the dollar.
If NXP takes control of Infineon., then NXP’s ties to TSMC could benefit Infineon’s automotive business because TSMC has announced it is investing in automotive-optimised platforms and semiconductor processes.
But the question remains whether Infineon’s German car company customers would trust an NXP-dominated Infineon. And an NXP-dominated Infineon is what could result from the re-structuring.
NXP’s CEO, Frans van Houten, is close to KKR, and it was seen as significant that Ziebart’s successor, Peter Bauer, was originally not designated ‘CEO’ but ‘Spokesman of the Management Board’. That was interpreted as suggesting that, in the event of an Infineon-NXP merger, it would be van Houten who would take the top job.
When the Infineon supervisory board was trying to force out former Infineon CEO Dr Wolfgang Ziebart, last May, it circulated the story to the German press that Infineon would authorise a capital increase, issue more shares, and sell the newly created shares to KKR so giving KKR a 40-50% stake in Infineon. That was expected to have been followed by KKR selling NXP to Infineon.
The re-structuring process started in 2006 when NXP was bought by a consortium led Wall Street buy-out company Kohlberg Kravis and Roberts (KKR).
Recently a couple of deals saw NXP hive off its wireless operation to ST. In the first of these, NXP retained a 20% holding in the two companies’ joint wireless activities. In the second deal, NXP relinquished that 20%.
NXP is eating cash, having spent $830m of its cash reserves in the first six months of this year, and is loss-making, and its CEO, Frans van Houten, said at the weekend that NXP will announce a ‘substantial reorganisation’ to reduce costs.
KKR has already written down the value of its investment in NXP, and MarketAxess reports that NXP's 9.5% bond can be bought for 73.75 cents on the dollar.
If NXP takes control of Infineon., then NXP’s ties to TSMC could benefit Infineon’s automotive business because TSMC has announced it is investing in automotive-optimised platforms and semiconductor processes.
But the question remains whether Infineon’s German car company customers would trust an NXP-dominated Infineon. And an NXP-dominated Infineon is what could result from the re-structuring.
NXP’s CEO, Frans van Houten, is close to KKR, and it was seen as significant that Ziebart’s successor, Peter Bauer, was originally not designated ‘CEO’ but ‘Spokesman of the Management Board’. That was interpreted as suggesting that, in the event of an Infineon-NXP merger, it would be van Houten who would take the top job.
Site Navigation
Blogs on EW
Mannerisms
Chip industry musings from David Manners
UK Tech StartupsNews on funding for electronics startups
Gadget FreakBuild ingenious inventions, win £250
Made by MonkeysAnalysis of bad designs
Parallel LinesNews and analysis on parallel processing
Directive DecoderGary Nevison on industry legislation
Electro-RamblingsEW website blog, flagging new content and features
Chips and BeerOut on the far flung semiconductor trail