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Mergers: Intel to buy Infineon unit

Jeremy Hobson Aug 30, 2010
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Mergers: Intel to buy Infineon unit

Jeremy Hobson Aug 30, 2010
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TEXT OF STORY

BILL RADKE: The huge computer chip producer Intel is buying a division of the German chip maker Infineon for $1.4 billion. The deal was announced today. It will bolster Intel’s wireless technology business. And it means August will go down as one of the busiest months of the past few years for mergers and acquisitions. Marketplace’s Jeremy Hobson is with us live from our bureau in New York with more. Hi Jeremy.

JEREMY HOBSON: Hey Bill.

RADKE: Why is this a big deal for Intel?

HOBSON: Well, Intel has been looking to expand its reach beyond just computers. And this will help in that regard because Infineon gives Intel a way into the smartphone market. And specifically, Apple’s iPhone 4, which uses Infineon’s chips. And by the will, Bill, it’s not just Intel that’s deal-hungry right now. We heard today that the French company Sanofi-Aventis made public its $18 billion offer for the U.S. biotech firm Genzyme. And I would like to say that I don’t come up with these names. I just have to say that.

RADKE: So all these mergers, Jeremy, how should the rest of us feel about this burst of deal making?

HOBSON: Well, we know companies are sitting on a lot of cash right now. So I guess it’s a good thing that they’re willing to get back into the game and starting spending. But I spoke with Howard Wheeldon, who’s a senior strategist at BGC Partners in London, and here’s what he said.

HOWARD WHEELDON: I’ve been in the industry over 40 years now and I can’t remember an acquisition that’s actually led to an enhancement of jobs. Jobs will go as a result of M&A activity. It’s as sure as night follows day.

But Bill, despite layoffs initially, Wheeldon says this activity probably means growth down the road. As he put’s it, mergers and acquisitions are capitalism’s way of saying it’s moving on.

RADKE: Moving on then. Marketplace’s Jeremy Hobson in New York, thank you.

HOBSON: You’re welcome, Bill.

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