Cree, Inc., Durham, NC, announced that it will terminate the definitive agreement it struck to sell its Wolfspeed Power and RF division to Infineon Technologies AG of Munich, Germany. The intended sale, which includes Cree’s silicon carbide substrate business for power, RF and gemstone applications, ran aground on national security concerns from the Committee on Foreign Investment in the United States (CFIUS), and Cree and Infineon were unable to identify alternatives which would address those concerns. As a result, the proposed transaction will be terminated, Cree said in a release. The termination of the transaction with Infineon will trigger a termination fee of $12.5 million being paid to Cree.
“We are disappointed that the Wolfspeed sale to Infineon could not be completed,” Chuck Swoboda, Cree chairman and CEO, said in the release. “In light of this development, we are going to shift our focus back to growing the Wolfspeed business. The Wolfspeed business has performed well this year as our customers have further realized the value of our unique technology and is on a great path as a part of Cree. The strength of our balance sheet and improving operating cash flow gives us the ability to invest in Wolfspeed, while continuing to pursue our LED and Lighting growth plans. We believe investing to grow all three businesses will create the most value for our shareholders.”