SAN FRANCISCO—LED maker Cree Inc.’s $850 million deal to divest of its Wolfspeed Power and RF division to Infineon Technologies AG has been challenged by U.S. government review and could be dead in the water, the companies said this week.
Cree (Durham, N.C.) announced the sale in July as part of its efforts to focus the company more on LED lighting, including retail products.
Cree said this week that the Committee on Foreign Investment in the United States (CFIUS)—a multi-agency U.S. government committee that reviews transactions for national security implications—has indicated it is unlikely to approve of the deal as currently structured.
Cree and Infineon are exploring whether they can modify the transaction in such a way that it would receive CIFUS clearance, Cree said. Though the company did not specify specifically what about the transaction CIFUS finds objectionable, such a modification would presumably entail Cree holding on to the portion of the business that the committee does not want to be owned by Germany-based Infineon.
”There is no assurance that the parties could achieve a transaction structure which would obtain CFIUS clearance,” Cree said in a statement. “As a result, pending the outcome of these efforts, the likelihood or timing of closing the transaction is uncertain.”
In a separate statement, Infineon said it remains committed to working closely together with both CFIUS and Cree to find solutions that would mitigate the concerns raised by the committee.
—Dylan McGrath covers the semiconductor industry and business news for EE Times.