LSI Corporation announced today that it has signed a definitive agreement to sell its mobility products business to Infineon Technologies AG for $450 million in cash, plus a performance-based payment of up to $50 million payable in the first quarter of 2009.
The sale is the result of a strategic review within LSI of its business portfolio following its merger with Agere Systems on April 2, 2007. LSI expects to benefit from the sale by realigning its resources to pursue growth opportunities for its storage systems and storage and networking semiconductor businesses.
“Since closing our merger with Agere, we have taken significant steps to drive shareholder value, including accelerating cost reductions, selling our consumer business, transitioning to a global contract manufacturing model, and completing a $500 million stock buyback,” said Abhi Talwalkar, LSI president and chief executive officer. “The sale of our mobility business will allow us to further focus our efforts on attractive market opportunities in storage and networking, where we have a strong presence, significant differentiation and the scale needed to be successful over the long term.”
Under terms of the agreement, Infineon will purchase the LSI Mobility Products Group (MPG), which designs semiconductors and software for cellular telephone handsets and complete chip-level solutions for satellite digital audio radio applications.
Upon closing, approximately 700 LSI employees will join the Infineon Communications Solutions business group, which manufactures and markets end-to-end semiconductor products and solutions for cellular, wireless and wired communications. Infineon will also enter into additional agreements with LSI, including an intellectual property agreement, a transition services agreement and a supply agreement.
“This move demonstrates our commitment to maintain and grow our leadership in the wireless market. The business acquired from LSI will significantly strengthen our position at important mobile phone makers and will add highly qualified experts to the Infineon team,” said Dr. Wolfgang Ziebart, President and CEO of Infineon Technologies.
“Infineon’s strong commitment to the mobility market will ensure our customers have access to a stronger supplier and a broader portfolio of solutions to address their needs,” added Talwalkar. “LSI is fully committed to work with Infineon to provide a seamless transition for customers.”