Although the transaction was vetoed by the US authorities, considering Cree's know-how in silicon carbide (SiC) as a strategic asset whose sale would represent a risk to the national security of the United States, this last minute transaction termination will cost Infineon a $12.5 million termination fee to be paid to Cree.
Earlier this month, the US Committee on Foreign Investment in the United States (CFIUS) had raised objections against the acquisition but the two companies have not been able to identify alternatives which would address the CFIUS's security concerns.
“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.”
Chuck 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.”
Wolfspeed will now be reported as a separate segment of Cree’s continuing operations.
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