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LSI sells mobility products biz to Infineon

Posted: 22 Aug 2007 ?? ?Print Version ?Bookmark and Share

Keywords:mobility products? Infineon agreement? LSI business?

LSI Corp. 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 Q1 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. 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.

Under terms of the agreement, Infineon will purchase the LSI Mobility Products Group (MPG), which designs semiconductors and software for mobile 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.

"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 CEO. "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."

"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 Wolfgang Ziebart, president and CEO of Infineon.

The transaction is expected to close Q4, subject to the satisfaction of customary closing conditions and regulatory approvals including those required by the Hart-Scott-Rodino Antitrust Improvements Act.

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