Infineon Sells Wireline Communications Business
Infineon Technologies AG has agreed to sell its Wireline Communications (WLC) business to an affiliate of US-based investor Golden Gate Capital for €250 M. Closing is expected in autumn 2009. This transaction will enable Infineon to focus on four segments in the future: Automotive, Industrial and Multimarket, Chipcard and Security and Wireless Solutions. In making this move, the company will be able to concentrate its resources more closely on growth and leadership in these four market segments.
“The divestiture of the WLC segment is an important step in our overall refinancing process. Furthermore, our stronger focus enables us to expand our leading technological position in the three key sectors energy efficiency, communications and security,” said Peter Bauer, CEO of Infineon Technologies AG.
As the Wireline Communications segment is relatively independent from the working and production processes of the company as a whole, the carve-out will be reasonable to effect.
Over the past few years, Infineon’s Wireline Communications segment has succeeded in continuously increasing its worldwide market share, which is currently more than 20 percent. As a result, WLC is number one in the target market of broadband access solutions and despite the economic downturn the segment has achieved a positive result over the past few quarters.
Continuity for customers is being ensured with all products, locations and development projects to be continued by the new company and around 800 patent families being transferred. Employment contracts for approximately 600 WLC employees will be transferred to the new company and an estimated 300 employees from Infineon central functions who already work on behalf of the WLC segment today are designated to join the new company.
Christian Wolff, designated CEO of the new company, stated, "WLC is well positioned to stand on its own feet. With the financial backing of Golden Gate Capital, we are well positioned to continue our investment in innovative broadband products for our customers, and therefore benefit from growth opportunities in the market.”