Cree, Inc. of Durham, North Carolina USA, reported that it ended the definitive agreement to sell its Power and RF division Wolfspeed to Infineon Technologies. Wolfspeed includes Cree’s silicon carbide substrate business for power, RF and gemstone applications.
Cree and Infineon cited the national security concerns that the Committee on Foreign Investment in the United States (CFIUS) raised about the proposed acquisition. The companies pointed out that they were not able to overcome these security issues, and, therefore, they decided to terminate the proposed transaction.
“We are disappointed that the Wolfspeed sale to Infineon could not be completed,” stated Chuck Swoboda, Cree chairman and CEO. “In light of this development, we are going to shift our focus back to growing the Wolfspeed business.”
“The Wolfspeed business has performed well this year as our customers have further realized the value of our unique technology and is on a great path as a part of Cree. The strength of our balance sheet and improving operating cash flow gives us the ability to invest in Wolfspeed, while continuing to pursue our LED and Lighting growth plans. We believe investing to grow all three businesses will create the most value for our shareholders,” Swoboda added. “I thank Dr. Ploss and the rest of the Infineon team for the significant amount of time and commitment they invested trying to successfully complete the transaction.”
The transaction termination with Infineon will trigger a termination fee of $12.5 million that Infineon will pay to Cree. As a result of the agreement termination, Cree said it has decided to again focus on running the Wolfspeed business as a separate segment of its continuing operations.