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Cypress Semiconductor Corp. (NASDAQ: CY) shares hit a multiyear high on Monday after the firm announced that Infineon would acquire it. The firms expect this transaction to close by the end of calendar year 2019 or early 2020.

Under the terms of the agreement, Infineon will offer $23.85 in cash for all outstanding shares of Cypress. This implies an enterprise value for Cypress of €9.0 billion. The offer price represents a 46% premium to Cypress’s unaffected 30-day volume-weighted average price during the period from April 15 to May 28, 2019.

Infineon intends ultimately to finance approximately 30% of the total transaction value with equity and the remainder with debt, as well as cash on hand.

Note that this acquisition is still subject to approval by Cypress’s shareholders and the relevant regulatory bodies, as well as other customary conditions.

Reinhard Ploss, CEO of Infineon, commented:

The planned acquisition of Cypress is a landmark step in Infineon’s strategic development. We will strengthen and accelerate our profitable growth and put our business on a broader basis. With this transaction, we will be able to offer our customers the most comprehensive portfolio for linking the real with the digital world. This will open up additional growth potential in the automotive, industrial and Internet of Things sectors. This transaction also makes our business model even more resilient. We look forward to welcoming our new colleagues from Cypress to Infineon. Together, we will continue our shared commitments to innovation and focused R&D investments to accelerate technology advancements.

Shares of Cypress Semiconductor traded up about 25% to $22.27 on Monday, in a 52-week range of $11.75 to $22.43. The consensus price target is $18.15.

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