Intel has entered into an agreement with Infineon Technologies AG to acquire the company's Wireless Solutions (WLS) business for US$1.4 billion.

Based in Neubiberg, Germany, Infineon offers semiconductor and systems that address energy efficiency, mobility, and security. The WLS business focuses on cellular platforms for phone makers around the world. According to Intel, WLS currently holds "leading positions in the field of wireless mobility and cellular platforms for smartphones and ultra low cost entry phones." WLS provides baseband processors, radio-frequency transceivers, power management integrated circuits (ICs), additional connectivity features, single-chip systems, and the corresponding system software. This, says the firm, helps to enable the smooth transmission of voice and high-speed data from the telecommunication network to the end user's device.

Infineon has more than 25,000 employees worldwide, including some operating from a U.S. subsidiary in Milpitas, CA. Last year, Infineon reported sales of Euro 3.03 billion. Annual revenue for the WLS business is Euro 917 million.

As part of Intel, WLS would operate as a separate team, working to help the company better integrate computers with smartphones for a more seamless connectivity experience.

"The global demand for wireless solutions continues to grow at an extraordinary rate," explains Paul Otellini, President and CEO of Intel. "The acquisition of Infineon's WLS business strengthens the second pillar of our computing strategy, Internet connectivity, and enables us to offer a portfolio of products that covers the full range of wireless options; from WiFi and 3G to WiMAX and LTE. As more devices compute and connect to the Internet, we are committed to positioning Intel to take advantage of the growth potential in every computing segment, from laptops to handhelds and beyond."

According to Infineon CEO Peter Bauer, the sale was made in an effort to help enhance the company's value.

"We can now fully concentrate our resources towards strong growth in our core segments Automotive (ATV), Industrial & Multimarket (IMM) and Chip Card & Security (CCS)," he adds. "We all stand to benefit enormously from this deal. Thanks to the outstanding effort of the employees and the management during the last years, WLS is excellently positioned to grow further with the new owner who is ideally suited for this business."

Intel says that the ultimate goal is expand its mobile and embedded product offerings to support everything from smartphones to tablet computers and netbooks.

The board of directors of Intel and the supervisory board and the management board of Infineon have approved the transaction. It is expected to close in the first quarter of 2011, subject to certain conditions.

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