Termination of acquisition! CREE Wolfspeed sale or failed!

CREE (CREE) announced on February 16th that it will terminate the Wolfspeed power and RF sector ("Wolfspeed") to sell the case, including silicon carbide (FSE:IFX / OTCQX:IFNNY) power, RF and gem applications for the substrate business. Cree and Infineon are unable to identify alternative solutions to the national security concerns of the U.S. Foreign Investment Committee (CFIUS), and as a result, the proposed transaction will be terminated.

Cree chairman and chief executive officer Chuck Swoboda said: we are not able to complete the sale of Wolfspeed disappointed. In view of this development, we will shift our focus to the growth of the Wolfspeed business. This year, the Wolfspeed business is doing well, because our customers are more aware of the value of our unique technology, and as part of the Cree on a great road. Our balance sheet strength and improved operating cash flow enable us to invest in Wolfspeed while continuing to pursue our LED and lighting growth plans. We believe that investment growth of all three businesses will create the greatest value for shareholders.

Chuck Swoboda added: "I am very grateful to Dr. Ploss and other members of the Infineon team, thank them for the successful completion of the exchange to invest a lot of time and commitment. "

Although, Cree, Infineon did not explain why the U.S. government will hold reservations about the transaction. CFIUS also did not point out any mitigation practices for this particular segment of the country's security risk. However, there have been reports that the production of Wolfspeed devices using military uses gallium nitride (GaN). DLA Piper LLP Brian Chilton pointed out that the supervision of lawyers, it shows that the U.S. government will protect the national defense industry attaches great importance to technology, the United States does not want to lose the advantages, so whether the buyer is a German manufacturer or Chinese manufacturers will be rejected.

The termination of the transaction with Infineon will trigger the termination fee paid to Cree $12 million 500 thousand. Due to the termination of the transaction and Cree decided to focus on running the Wolfspeed business, Wolfspeed will now be reported as an independent part of Cree's ongoing operations.

Last July, Infineon Technologies and Cree announced that it has signed a definitive agreement to acquire Wolfspeed, Infineon and RF power owned by Cree (RF), the amount of purchase of this full cash payment of approximately $850 million.

Wolfspeed is located in the U.S. state of North Carolina Research Triangle Park (Research Triangle Park), nearly 30 years belonging to Cree's, is a major supplier of SiC power and GaN-on-SiC RF power solutions, its core ability includes SiC single crystal gallium nitride layer of SiC wafer substrate manufacturing and the RF power should be used. Infineon CEO Reinhad Pross (Reinhard Ploss) has said that Wolfspeed production of silicon carbide chips in the next few years will gradually replace the traditional chips, especially in the electric and hybrid vehicle market.

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