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JULY 2019       TAP TIMES          -6-


                   M&A activity (from 4)




        who is also one of the most controversial
        CEOs in Silicon Valley.




        $9 billion deal
        The proposed Infineon-Cypress deal is for
        $23.85 per Cypress share, said to be a
        valuation of about $9 billion.  The public-
        ity release from Infineon says the price                 Infineon CEO Reinhard Ploss:  “This is a landmark step in
        will be a 46 percent premium on Cypress’                 Infineon’s strategic development. (Infineon)
        “unaffected” 30-day volume-weighted av-
        erage price from April 15-May 28.                        Reuters reported on June 14 that a Broad-
                                                                 com forecast suggested trade tensions and
        According to Infineon, the acquisition is                the ban on doing business with China’s gi-
        “fully underwritten by a consortium of                   ant telecom provider Huawei would drasti-
        banks.”  Infineon, however, said it plans                cally affect Broadcom’s sales.
        to ultimately finance 30 percent of the
        deal.
                                                                 Hardest evidence yet

        The Infineon acquisition comes barely a                  The Broadcom forecast was included in the
        week before an even larger acquisition:                  company’s Q2  results,  and,  said Reuters,
        Raytheon and United Technologies’ “merg-                 “was the hardest evidence yet of the dam-
        er of equals,” was disclosed.                            age (Trump’s) trade war with Beijing may
                                                                 do to the global industry.”

        This aerospace combination will bring
        nearly $74 billion in yearly sales, and                  On  the  news,  shares  in  Broadcom  fell  as
        makes it second only to Boeing in the                    much  as  8.6  percent,  reducing  the  com-
        aerospace/defense sector.                                pany’s market value by $9 billion.

                                                                 Despite this bad news, there has been no

        Trump’s tariffs                                          suggestion  that  Infineon  plans  to  modify
        The proposed Cypress acquisition comes                   its takeover.
        at a time when the global semiconductor
        business is already being strongly affected
        by the Trump Administration’s recent tar-                $539 million revenue
        iffs and is barely breathing a sigh of relief            The acquisition will give the German elec-
        for the relaxation of the almost-imposed                 tronics behemoth a San Jose-based com-
        U.S.-Mexico tariffs.                                     pany that reported $539 million in revenue
                                                                 for Q119.  For the prior quarter in 2018,

        The existing tariffs, especially those im-               Cypress reported slightly better revenues
        pacting the U.S. trade with China present                of $604 million.
        the industry with a host of new problems,
        not tied to the industry’s usually volatile              Income for Q119, however was reported at
        conditions.                                              $19.71 million (GAAP) versus $267 million
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