Cree has reversed course, saying it will continue running the Wolfspeed business and report its financials as a separate segment of its operations.
The U.S. government has scuttled another business deal in the technology sector over national security concerns. This week, North Carolina-based Cree has terminated the $850 million deal to sell its Wolfspeed Power and RF business to Infineon Technologies.
Following the termination of the transaction, Cree (Durham, N.C.) reversed course and said it would continue running the Wolfspeed business and report its financials as a separate segment of its continuing operations. Cree had said last July that the proposed sale of Wolfspeed to Infineon was triggered by Cree’s strategy to heighten its focus on being an LED lighting company.
”The Wolfspeed business has performed well this year as our customers have further realised the value of our unique technology and is on a great path as a part of Cree,” said Chuck Swoboda, Cree chairman and CEO, in a statement. “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.”
As a result of the acquisition’s termination, Infineon must pay a $12.5 million fee to Cree, Cree said.
Both Cree and Infineon said earlier this month that the Committee on Foreign Investment in the United States (CFIUS)—a multi-agency government committee that has the power to block acquisitions on U.S. national security grounds—had raised concerns about the deal. At the time, both companies said they would explore whether the sale could be pushed through under terms that CFIUS would agree to, including potential divestiture of some of the Wolfspeed business.
It is unclear what specifically about the deal raised national security concerns. CFIUS does not disclose details of its investigations because it is prohibited by law from doing so. But Cree has in the past touted Wolfspeed’s GaN-on-SiC RF technology for military applications.
This article first appeared on EE Times U.S.