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To: Johnny Canuck who wrote (46258)	8/30/2010 4:28:16 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 70666

August 30, 2010 Intel to Acquire Infineon Wireless Unit By ANDREW ROSS SORKIN NEW YORK — Less than two weeks after saying it would buy McAfee, Intel announced Monday that it would acquire the German chip maker Infineon’s wireless business for about $1.4 billion in cash. Paul Otellini, the head of Intel, said that more and more devices were connecting to the Internet and that the wireless connectivity was a sector where the company saw “growth potential.” The Infineon unit makes chips used in laptops, netbooks and smartphones, including the Apple iPhone, and will strengthen Intel’s line-up of 3G, 4G Wimax and Wi-Fi cards. Intel expects the deal to close in the first quarter of next year, pending regulatory approvals. For Intel, the deal would give it a powerful foothold in the market for smartphone chips, a segment of the business that is experiencing double-digit annual growth. Infineon said the wireless unit accounted for about €917 million, or $1.17 billion, in earnings — about a third of the company’s revenue — in the last fiscal year. Its sales in the third quarter jumped 38 percent. Intel’s own efforts to build a wireless chip business through its Atom processors have faltered, analysts say. Intel has deals with LG and Nokia to provide wireless chips. Mr. Otellini has been seeking ways to get into this market and diversify the company beyond PC chips. Infineon, based in Neubiberg, Germany, had said this month that it was seeking “a potential transaction” for the wireless chip unit. Intel has also faced antitrust scrutiny in its primary chip business. This month, it reached a settlement with the U.S. Federal Trade Commission to resolve regulators’ complaints that the company had thwarted the efforts of competitors like Advanced Micro Devices and Nvidia. Under that settlement, Intel agreed to refrain from a variety of business practices in an effort to resolve accusations of anticompetitive behavior in the market for computer processor and graphics chips. [Johnny: I would expect to see more of this going forward. Companies sitting on cash should be able to buy companies at lower multiple than they have been able to close deals in the last few years. ]