German chip set maker Infineon Technologies is divesting its wireline comms division for €250 million ($350.8 million) to US private equity firm Golden Gate Capital.
The profitable division, which specializes in fixed communications chips for broadband and VoIP networks has grown its market share by 20% in recent years. It has a raft of international contracts with carriers offering VoIP telephony services, fast internet connections and interactive services via DSL.
Infineon has been operating the wireline division as a distinct unit from the rest of the company, which has struggled in the downturn. The company said that the transaction, which is due to close in Q3, would "significantly improve Infineon's financial situation."
The transaction will allow Infineon to concentrate its resources on four market segments: automotive, industrial & multimarket, chipcard & security, and wireless solutions.
The head of the division for 14 years, Christian Wolff, will be CEO of the new entity. "With the financial backing of Golden Gate Capital, we are well-positioned to continue our investment in innovative broadband products for our customers, and therefore benefit from growth opportunities in the market," Wolff said.
Under the deal, all products, locations and development projects will be continued by the new company including the transfer of around 800 patent families.
The deal guarantees continued employment for around 600 existing employees, while an estimated 300 staff from the Infineon corporate office who already work on behalf of the division will be offered roles in the new company. Globally, Infineon Technologies has 29,100 employees.