March 9, 2020 / 11:43 PM / a month ago

U.S. clears Infineon's $10 billion takeover of Cypress

FILE PHOTO: Reinhard Ploss, CEO of German semiconductor manufacturer Infineon and CFO Sven Schneider, pose before the company's annual shareholder meeting in Munich, Germany, February 20, 2020 REUTERS/Michael Dalder/File Photo

BERLIN (Reuters) - Shares in Infineon Technologies (IFXGn.DE) rallied in early trading on Tuesday after a U.S. national security review raised no concerns over its proposed $10 billion takeover of Cypress Semiconductor Corp (CY.O).

Infineon shares opened up 6.1%, regaining some ground lost on a report last week that the Committee on Foreign Investment in the United States (CFIUS) had advised President Donald Trump to block the deal on national security grounds.

CFIUS, a body led by the U.S. Treasury, informed Cypress that it had determined “there are no unresolved national security concerns” with the merger, the San Jose, California-based company said in a statement.

Cypress shares surged 45% to $22.20 in after-hours U.S. trading on Monday.

Infineon said that, while the CFIUS review was now complete, the transaction remains subject to approval from China’s State Administration for Market Regulation and other customary closing conditions under the merger agreement.

Munich-based Infineon, announcing the deal last June, said it would create an automotive leader with a 13% market share by combining its prowess in managing electric drivetrains with Cypress’s edge in in-car entertainment.

Infineon, a constituent of Germany’s DAX blue-chip index, had hoped for a lift into the world’s top-10 semiconductor makers through the deal.

Reporting by Douglas Busvine in Berlin and Ismail Shakil in Bengaluru; Editing by Subhranshu Sahu and Emelia Sithole-Matarise

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