Infineon: Infineon strengthens automotive networking business with billion-euro takeover

NEUBIBERG (dpa-AFX) - Chip manufacturer Infineon is expanding its business with the automotive industry through a multi-billion dollar acquisition in the USA. For 2.5 billion US dollars (2.3 billion euros), the group is taking over the automotive Ethernet business of Marvell Technology, a memory, telecommunications and semiconductor company. With this acquisition, Infineon intends to strengthen its position in software-defined vehicles. The transaction is to be financed by a cash payment from existing liquid funds and additional debt capital, as the Group announced on Monday evening in Neubiberg. The takeover was well received on the market, at least in terms of content. For the year 2025, the Marvell division expects sales of 225 to 250 million dollars and a gross margin of around 60 percent. Infineon expects growth to accelerate further in the coming years. Revenues are expected to increase by an average of around 25 percent annually until 2030. The company can build on a design-win pipeline of around four billion US dollars over the next five years. The customers of Marvell's automotive Ethernet business reportedly include more than 50 car manufacturers, including eight of the top ten. Infineon expects further cost synergies through the bundling of research and development activities as well as in the area of manufacturing. Traders see the takeover as a "strategically well-suited acquisition". However, the share, which has been under pressure in recent days due to strong market turbulence, was initially unable to benefit: It lost 1.2 percent on Tuesday morning. Several analyst firms also lowered their price targets for the share in connection with the uncertainty surrounding US customs policy. Analysts also praised the acquisition in an initial reaction. Marvell's Ethernet business will contribute an estimated 2.8 percent of sales in Infineon's automotive segment this year, wrote analyst Sandeep Deshpande from JPMorgan. The deal is also expected to have a positive impact on the chipmaker's profitability. The automotive Ethernet business of Marvell Technology is a strong strategic addition in the changing environment of software-defined vehicles, noted Malte Schaumann of Warburg Research. While the purchase price appears high at first glance, the good strategic prospects, strong profitability and high growth put the valuation into perspective. Ethernet is a key technology for communication and connectivity solutions with low delays and high bandwidth, which is crucial for software-defined vehicles. "The acquisition is an excellent strategic fit for Infineon as the world's leading supplier of semiconductor solutions for the automotive industry," commented Infineon Group CEO Jochen Hanebeck on the takeover. It also opens up new opportunities in the field of physical artificial intelligence, such as humanoid robots. The Marvell division's portfolio reportedly supports data transfer rates from 100 megabits to 10 gigabits per second as well as the security functions required for current and future vehicle networks. The Marvell division employs several hundred people. The transaction is subject to regulatory approvals, including the Committee on Foreign Investment in the United States (CFIUS). It is expected to be completed before the end of this year./nas/lew/mis NEUBIBERG (dpa-AFX) - Chip manufacturer Infineon is expanding its business with the automotive industry through a multi-billion dollar acquisition in the USA. For 2.5 billion US dollars (2.3 billion euros), the group is taking over the automotive Ethernet business of Marvell Technology, a memory, telecommunications and semiconductor company. With this acquisition, Infineon intends to strengthen its position in software-defined vehicles. The transaction is to be financed by a cash payment from existing liquid funds and additional debt capital, as the Group announced on Monday evening in Neubiberg. The takeover was well received on the market, at least in terms of content. For the year 2025, the Marvell division expects sales of 225 to 250 million dollars and a gross margin of around 60 percent. Infineon expects growth to accelerate further in the coming years. Revenues are expected to increase by an average of around 25 percent annually until 2030. The company can build on a design-win pipeline of around four billion US dollars over the next five years. The customers of Marvell's automotive Ethernet business reportedly include more than 50 car manufacturers, including eight of the top ten. Infineon expects further cost synergies through the bundling of research and development activities as well as in the area of manufacturing. Traders see the takeover as a "strategically well-suited acquisition". However, the share, which has been under pressure in recent days due to strong market turbulence, was initially unable to benefit: It lost 1.2 percent on Tuesday morning. Several analyst firms also lowered their price targets for the share in connection with the uncertainty surrounding US customs policy. Analysts also praised the acquisition in an initial reaction. Marvell's Ethernet business will contribute an estimated 2.8 percent of sales in Infineon's automotive segment this year, wrote analyst Sandeep Deshpande from JPMorgan. The deal is also expected to have a positive impact on the chipmaker's profitability. The automotive Ethernet business of Marvell Technology is a strong strategic addition in the changing environment of software-defined vehicles, noted Malte Schaumann of Warburg Research. While the purchase price appears high at first glance, the good strategic prospects, strong profitability and high growth put the valuation into perspective. Ethernet is a key technology for communication and connectivity solutions with low delays and high bandwidth, which is crucial for software-defined vehicles. "The acquisition is an excellent strategic fit for Infineon as the world's leading supplier of semiconductor solutions for the automotive industry," commented Infineon Group CEO Jochen Hanebeck on the takeover. It also opens up new opportunities in the field of physical artificial intelligence, such as humanoid robots. The Marvell division's portfolio reportedly supports data transfer rates from 100 megabits to 10 gigabits per second as well as the security functions required for current and future vehicle networks. The Marvell division employs several hundred people. The transaction is subject to regulatory approvals, including the Committee on Foreign Investment in the United States (CFIUS). It is expected to be completed before the end of this year./nas/lew/mis