Storage vendor LSI has signed a definitive agreement to sell its mobility products business to Infineon Technologies for $450m.
The cash deal includes an additional $50m performance-based payment in the first quarter 2009, and is the result of a strategic review within LSI of its business portfolio, following its merger with Agere in April.
LSI claims the sale will give it the necessary resources to pursue growth opportunities for its storage systems and storage and networking semiconductor businesses.
Once the sale is completed, about 700 LSI employees will join the Infineon Communications Solutions business group, and Infineon will also enter into additional agreements with LSI, including an intellectual property agreement, a transition services agreement and a supply agreement.
Abhi Talwalkar, chief executive of LSI, said: “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. 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.”
Wolfgang Ziebart, chief executive of Infineon, said: “This move demonstrates our commitment to maintain and grow our leadership in the wireless market. 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.”
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