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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 added a US power-management technology business, including gallium-nitride-on-silicon capability, to Infineon’s portfolio of power semiconductors.

How much did Infineon pay for International Rectifier?

The announced offer was $40 per share in cash. Infineon valued the transaction at approximately $3.0 billion in fully diluted equity consideration and approximately $2.4 billion in enterprise value. These are different measures of the deal, not competing estimates of one figure: equity consideration values the shares, while enterprise value is the separate transaction measure Infineon disclosed. Infineon’s August 20, 2014 announcement set out the terms.

When was the acquisition announced and completed?

Date Milestone
August 20, 2014 Infineon and International Rectifier announced a definitive merger agreement at $40 per share in cash.
November 4, 2014 International Rectifier shareholders approved the merger; regulatory closing conditions remained.
January 13, 2015 Infineon announced that the acquisition had closed following the required approvals. International Rectifier became part of Infineon.
January 29, 2015 Infineon’s fiscal first-quarter release reported the completed acquisition and described International Rectifier as a US power-management technology provider.

The closing date—not the 2014 announcement date—is when the transaction was completed. Infineon’s closing announcement confirmed completion on January 13, 2015.

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Why did Infineon buy International Rectifier?

The stated aim was to strengthen Infineon’s position in power semiconductors and give customers a broader set of products. The businesses had complementary portfolios and regional footprints, while the combination was expected to increase scale, particularly in 300 mm manufacturing. International Rectifier also brought technologies that extended Infineon’s reach across silicon, silicon carbide (SiC) and gallium nitride (GaN) power devices and integrated circuits. Infineon’s transaction presentation described these strategic benefits.

What International Rectifier added

International Rectifier was an advanced manufacturer of GaN-on-silicon power semiconductors, a capability specifically highlighted in the transaction announcement. The company also brought an established power-management business: Infineon reported fiscal-2014 revenue of US$1.1 billion and approximately 4,200 employees for International Rectifier. Infineon’s fiscal first-quarter 2015 release reported those scale figures.

How was the transaction structured and financed?

Legally, Infineon’s wholly owned Surf Merger Sub Inc. merged into International Rectifier, which survived as an Infineon wholly owned subsidiary. Infineon said it planned to finance the deal with €1.5 billion of new debt and €800 million of cash on hand, as described in its transaction presentation.

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What financial benefits did Infineon expect?

At announcement, Infineon forecast that the acquisition would be adjusted pro-forma EPS accretive 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 guarantees or evidence by themselves that the targets were achieved. The transaction presentation set out the expectations.

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