Cree has announced that it will terminate the definitive agreement to sell its Wolfspeed Power and RF division, which includes the silicon carbide substrate business for power, RF and gemstone applications, to Infineon Technologies AG. Cree and Infineon have been unable to identify alternatives which would address the national security concerns of the Committee on Foreign Investment in the United States (CFIUS), and as a result, the proposed transaction will be terminated.
The termination of this transaction with Infineon will trigger a termination fee of $12.5 million being paid to Cree. As a result of the transaction termination and Cree’s decision to focus on running the Wolfspeed business, Wolfspeed will now be reported as a separate segment of Cree’s continuing operations.
Cree will now shift their focus back to growing the Wolfspeed business. The Wolfspeed business has performed well this year. The strength of their balance sheet and improving operating cash flow gives Cree the ability to invest in Wolfspeed, while continuing to pursue their LED and Lighting growth plans. The Company will provide a complete review of its fiscal 2017 third quarter results and fourth quarter outlook on its regularly scheduled financial results call on April 25th at 5:00 p.m. Eastern time.
