Infineon agreed to buy International Rectifier for $40 per share in cash on August 20, 2014, and completed the acquisition on January 13, 2015. The deal was valued at about $3.0 billion on a fully diluted equity basis and about $2.4 billion in enterprise value. Infineon said the purchase would expand its power-semiconductor portfolio, scale and reach.
What Infineon paid
The announced offer was $40 in cash for each International Rectifier share. Infineon described the consideration as approximately $3.0 billion on a fully diluted equity basis, while the deal’s enterprise value was approximately $2.4 billion. Those figures measure different things and should not be treated as interchangeable.
Infineon said it planned to finance the transaction with €1.5 billion of new debt and €800 million of cash on hand. The agreement used a merger structure: Infineon subsidiary Surf Merger Sub Inc. merged into International Rectifier, which survived as an Infineon wholly owned subsidiary.
When the acquisition happened
- August 20, 2014: Infineon and International Rectifier announced a definitive merger agreement at $40 per share in cash.
- November 4, 2014: International Rectifier shareholders overwhelmingly approved the merger. Regulatory closing conditions remained.
- January 13, 2015: Infineon announced that the transaction had closed after the required approvals. International Rectifier became part of Infineon.
- January 29, 2015: Infineon’s fiscal first-quarter release reported the completed acquisition.
Why Infineon wanted International Rectifier
The deal was intended to strengthen Infineon’s power-semiconductor business and give customers a broader range of products. Infineon pointed to complementary product portfolios and regional footprints, along with the opportunity to increase scale, particularly in 300 mm manufacturing.
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The technology fit was also significant. Infineon said the combined company would offer power devices and integrated circuits based on silicon, silicon carbide (SiC) and gallium nitride (GaN). International Rectifier brought GaN-on-silicon capability, which Infineon identified as an addition to its position in wide-bandgap power technologies.
International Rectifier was a substantial business: Infineon reported that it had approximately 4,200 employees and fiscal-2014 revenue of US$1.1 billion. Infineon’s closing announcement described the company as a US power-management technology provider.
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What Infineon forecast for the deal
At announcement, Infineon forecast that the acquisition would be accretive to adjusted pro-forma earnings per share in fiscal 2015. It also expected the acquired business to reach at least a 15% segment-result margin by the second full fiscal year after closing. These were management forecasts, not guaranteed results or proof of what the business ultimately achieved.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What the transaction established
The acquisition brought International Rectifier into Infineon and broadened the combined company’s power-semiconductor portfolio across silicon, SiC and GaN. At closing, Infineon CEO Reinhard Ploss called it “an important step for Infineon to foster our position as a global market leader in power semiconductors.”
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