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Sistema eyes Infineon investment

Posted: 19 May 2008     Print Version  Bookmark and Share

Keywords:chip maker  takeover  semiconductor industry 

Russian diversified company Sistema has thrown its hat into the ring of possible investors for the beleaguered chip maker Infineon. In an interview with newspaper Handelsblatt, Sistema CEO Alexander Gontcharuk called Infineon "a very interesting target".

Gontcharuk said Infineon would be very interesting for Sistema for its "excellent" R&D. A complete takeover by the Russians, however, would be very unlikely, he said. Given Infineon's significance for the German semiconductor industry, political obstacles would be expected. In addition, the present point in time would be less than optimal for a takeover since Infineon has strong cost disadvantages against Asian competitors through its production in Western Europe, Gontcharuk explained. The Sistema top executive also said that his company currently is more interested in acquiring small high-tech companies than large industry heavy-weights.

Sistema is the largest diversified holding in the former Soviet Union. Among other activities, Sistema is engaged in telecommunications and the Sitronics technology holding which in turn runs chip maker Mikron. Sistema's principal shareholder Vladimir Jevuchenko is said to be one of Russia's richest men—and that he has excellent contacts to the Kremlin.

Sistema has already tried before to invest in a German flagship company: In November 2006, Sistema had launched an initiative to buy a significant stake of Deutsche Telekom. The push, however, failed due to resistance from politics. Nevertheless, it looks like the foray has created lasting connections between the two companies: According to Financial Times Deutschland, former Deutsche Telekom CEO Ron Sommer is now under contract for Sistema—as a strategic advisor.

Over the past months, Infineon's future has repeatedly been subject to speculations. Against the background of poor financial performance across most of the Western European semiconductor industry, experts expect the consolidation to speed up. As recently as yesterday, it has become known that Infineon supervisory board chairman Max Kley talked to NXP over the possibility of a merger.

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