Intel Buying Infineon Wireless Unit for $1.4B

[Face]

NEWS HIGHLIGHTS


Intel to purchase Infineon's Wireless Solutions Business, called WLS, in a cash transaction valued at approximately $1.4 billion. The deal is expected to close in the first quarter of 2011.

WLS sale enables Infineon to expand leading position in markets for automotive, industry and security technologies.

WLS will operate as a standalone business. Intel is committed to serving WLS' existing customers, including support for ARM-based platforms.

The acquisition expands Intel's current Wi-Fi and 4G WiMAX offerings to include Infineon's 3G capabilities and supports Intel's plans to accelerate LTE. The acquired technology will be used in Intel® Core processor-based laptops, and myriad of Intel® Atom™ processor-based devices, including smartphones, netbooks, tablets and embedded computers.

The deal aligns with Internet connectivity pillar of Intel's computing strategy.


WLS, a leading provider of cellular platforms to top tier global phone makers, will operate as a standalone business serving its existing customers. WLS will also contribute to Intel’s strategy to make connected computing ubiquitous from smartphones to laptops to embedded computing.


Intel Newsroom (http://newsroom.intel.com/community/intel_newsroom/blog/2010/08/29/intel-to-acquire-infineons-wireless-solutions-business?cid=rss-90004-c1-258882) via Yahoo Finance (http://finance.yahoo.com/news/Intel-to-Acquire-Infineons-bw-1862515847.html?x=0&.v=1)

[madcho]

wtf intel with antivirus and more wireless ... and drop ? larabee ... what's going on ?

[~CS~]

They have too much money.

[Craftyman.]

Could Intel be going back to developing UWB?

[Hornet331]

well they had 18 billion cash on hand... even with the to acquisitions they still have plenty left.. :p:

[[XC] gomeler]

Nothing wrong with investing your money in a few acquisitions while they are cheap and you have oodles of cash sitting around.

[nn_step]

why do they keep buying the B teams?

[Hornet331]

Because the a-teams are usually quite more expensive? :D

Just look at the mcaffe deal, if they would have aqquired symantec for the same premium, it would have cost them ~18B... compared to the 7B they payed for mcafee

[Chaserjzx100]

now i'm confused.. they are acquiring companies that doesn't even connect at all.. they're like a kid in a candy store ^_^

[Florinmocanu]

They are acquiring them because the future of SOC/mobile market (low power) will be very big so they are preparing to go on that market as well. they have cpu, integrated graphics, now networking is the target.

[nn_step]

They are acquiring them because the future of SOC/mobile market (low power) will be very big so they are preparing to go on that market as well. they have cpu, integrated graphics, now networking is the target.

Infineon is to quality wireless, as SiS is to Uber performance chipset.

They just don't belong in the same sentence.

[Tenknics]

Infineon is to quality wireless, as SiS is to Uber performance chipset.

They just don't belong in the same sentence.

Which is why Intel didn't buy the entire company. Just the wireless. Regardless of the quality of product Infineon makes, it doesn't matter anymore. Intel now owns the rights of the technology. Thats all they wanted. Now that they own the tech, they will probably make it better and obviously fab it themselves... like the previous guys said, this is for Atom and future SoC chips. Intel wants a complete "all intel" SoC. Not a chip from this company to do this and another chip from another company to do that..No..all intel.

So Infineon having crappy products is a moot point to Intel, cause well Infineon won't be making them anymore cause they will :up:

[Hoboclese]

wireless hardware based antivirus?

[Bradan]

wireless hardware based antivirus?

:para: It seems... tooo obvious... :para:

[god_43]

the Intel way, buy market share and companies, but don't develop that stuff itself. i don't think i would have a big deal if it was a smaller company, but Intel is too big man! they must have settled with FTC so they could have carte Blanche when it came to buying these companies.

[XSAlliN]

gomeler;4531195']Nothing wrong with investing your money in a few acquisitions while they are cheap and you have oodles of cash sitting around.

Of course it's wrong - if they did a BAD ACQUISITIONS! :shakes:

LE.That again, it's bad just for the buyer and this gives me an idea - Intel being so high on crack at the moment, might buy anything you trow at them so I should do a sell of my own and don't need much - just few millions $ (easy win!). ;)

[ethernal]

I admit that the premiums paid over equity at time of purchase seems a little extravagant for McAfee - but the simple fact of the matter is that Intel had $18 billion in cash. The market is flush with liquidity and short term investments are yielding near zero. So Intel has three options: take the opportunity cost of $18 billion sitting at near zero yield, pursue a stock buyback/dividend increase, or make strategic long term investments (generally acquisitions).

A dividend/buyback program would probably be "best" - but I think that Intel is worried about the future of a large portion of their core business (CPU performance is sufficient for the average consumer - now it's just a matter of doing it cheaper) and wants to diversify and maintain material worth rather than throw the money away.

Basically - you can look at this (McAfee and this acquisition) as an $8 billion dollar hedge against declining consumer CPU revenues. I don't necessarily think it was the best move - but that is why it was done.

[zanzabar]

Infineon is to quality wireless, as SiS is to Uber performance chipset.

They just don't belong in the same sentence.

so im sure that u will just give up the integrated multi frequency antenna, we can go back to pull outs or have every1 work like an iphone4.


but like every1 else i dont get intels plan, they did TIs cable modem (and i think card unit), then mcafee, now this. i know that they want in on mobile but this seams a little random. maybe they are going to make LTE modems/soc packages with integrated security

[savantu]

I admit that the premiums paid over equity at time of purchase seems a little extravagant for McAfee - but the simple fact of the matter is that Intel had $18 billion in cash. The market is flush with liquidity and short term investments are yielding near zero. So Intel has three options: take the opportunity cost of $18 billion sitting at near zero yield, pursue a stock buyback/dividend increase, or make strategic long term investments (generally acquisitions).

A dividend/buyback program would probably be "best" - but I think that Intel is worried about the future of a large portion of their core business (CPU performance is sufficient for the average consumer - now it's just a matter of doing it cheaper) and wants to diversify and maintain material worth rather than throw the money away.

Basically - you can look at this (McAfee and this acquisition) as an $8 billion dollar hedge against declining consumer CPU revenues. I don't necessarily think it was the best move - but that is why it was done.

There was a bidding war for McAfee. Someone else was also interested.

[Chaserjzx100]

There was a bidding war for McAfee. Someone else was also interested.

would you happen to know who's the other one??

[saaya]

now i'm confused.. they are acquiring companies that doesn't even connect at all.. they're like a kid in a candy store ^_^but... but... they are so cheap! :lol:
really, it looks to me like intel is one a shopping spree, buying things they dont really need, just cause it sees good bargains in those companies...

while that might be true, i dont see how they will be of much use to intel...
im pretty sure it would have costed them fractions of those transactions to just come up with their own hard and software, than buying it... and they probably would have ended up with better quality and features as well...

and like somebody said... they canceled lrb and then buy companies they REALLY dont need... thats def a weird strategy...

[savantu]

would you happen to know who's the other one??

Some analysts speculate that IBM or Oracle might have been in the loop.

http://www.networkworld.com/news/2010/081910-intel-mcafee-acquisition.html?source=nww_rss

[nn_step]

Some analysts speculate that IBM or Oracle might have been in the loop.

http://www.networkworld.com/news/2010/081910-intel-mcafee-acquisition.html?source=nww_rss

So they are arguing because a bunch of companies are doing retarded bids for a division that is expected to lose money; makes buying it any less retarded?

I guess we now know which company is run by the greater fool :ROTF::rofl::rofl::ROTF::rofl::rofl::ROTF::rofl: :ROTF:

[naokaji]

Some people here need to realize Intel is far more than Cpus and that corporate buyouts are the most profitable when done during tough economic times.

[ethernal]

There was a bidding war for McAfee. Someone else was also interested.


Just because someone else was potentially bidding on McAfee doesn't make my statement less valid. Intel paid a huge premium over the market's perceived value of the company.

Acquisitions can and do work - but as a general rule, large acquisitions tend to yield poor relative long term results. The probably that an acquisition will end up being a poor investment is directly correlated to a price paid on premium of equity upon purchase.

While admittedly the equity market is a bit of a mess right now (let's go make a bond bubble instead), Intel is basically telling the market that McAfee is worth over 50% more as part of Intel than McAfee standing alone. While I am sure that there are some integrative benefits - I doubt that it is going to be to that degree given the complete lack of obvious synergy (other than questionable bundling).

Then again - who am I to judge - that Level One purchase for $2 billion worked out well.

[Chaserjzx100]

Some analysts speculate that IBM or Oracle might have been in the loop.

http://www.networkworld.com/news/2010/081910-intel-mcafee-acquisition.html?source=nww_rss

hahaha sorry... first thing that came to my mind was IBM, Oracle and Intel playing monopoly literaly :D

[Face]

Intel’s CEO explains his multibillion-dollar acquisition spree

http://video.foxbusiness.com/v/4324695/intel-ceo-on-wireless-deal--/

http://video.foxbusiness.com/v/4324688/intel-ceo-on-acquiring-mcafee-/



On Steve Job’s reaction to Intel’s purchase of Infineon:

“Steve was very happy. The industry was abuzz that this business unit was on the market, and there were a number of competing companies for it. I think they are very happy that Intel won the bid.”

On why it took Intel so long to make this purchase:

“There were a number of these that were available. In our mind this was the best technology we could find at the right price. We are very happy with the capabilities of the company and their customer list.”

On buying Infineon wireless business:

“The key thing is the technology they have today, the customer connections they have today, and where the technology in general is going. We look forward to a period in the not so distant future where all of these functions can be on a single chip. Intel has great capabilities and applications processors today, but bringing in the capabilities for 3G and ultimately LTE (Long-term Evolution) onto the chip, that makes a lot of sense to us from an economic and power standpoint.”

On how McAfee will be integrated into their products:

“The first products will be things we have worked on before the acquisition discussions, which will come into the PC platforms next year. We will take the combination of hardware based security that Intel already produces and enhance that with software capability from McAfee. That will only get better in PCs over time. Then what we would like to do is drive that same capability not just into smartphones, but also anything that is going to get smart and get connected; your television, your cars, are all going to have internet connections. You want that same protection. We call this a third pillar of computing. We have energy-efficient performance, we have connectivity, and now we’ve got security.”

On when they will be able to put Infineon technology and atom chip technology onto a single chip:

“You will see them combined inside a phone as separate chips next year. The single chip implementation will be farther down the road.”

On the strategy behind selling XScale only to reenter the wireless realm with the purchase of Infineon:

“It’s 180 degrees from what we sold. What we had was an XScale-based applications processor business with a little bit of comms technology in it. Today what we are picking up is a big comms business with the baseband technology the protocol stack and all the software that goes with it. People want the capability of Intel architecture for their apps processor and the capability of Intel Silicon, and the combination of those was something we didn’t have in the divestiture of the XScale business four or five years ago.”

http://deals.venturebeat.com/2010/08/30/intels-ceo-explains-his-multibillion-dollar-acquisition-spree/#disqus_thread

[JumpingJack]

why do they keep buying the B teams?

The A teams weren't for sale ....

[saaya]

arent infineon and mcaffee rather C? :D

[JumpingJack]

arent infineon and mcaffee rather C? :D

So were the Baltimore Colts, and when they were bought and moved to Indy they made it to a super bowl :)