LSI to Sell Mobile Chip Business to Infineon for $450 Million in Cash
Chipmaker LSI rose 4 percent after the closing bell on Monday after the company said it would sell its mobile phone chip business to Germany's Infineon Technologies.
The Milpitas, Calif.-based company said it will sell its mobility products business to Infineon for $450 million in cash with potential performance-based incentives of up to $50 million, payable in the first quarter of 2009.
"The sale of our mobility business will allow us to further focus our efforts on attractive market opportunities in storage and networking, where we have a strong presence, significant differentiation and the scale needed to be successful over the long term," said Abhi Talwalkar, LSI chief executive officer, in a prepared statement.
Shares of LSI rose to at $6.41 in after-hours trading after closing on the New York Stock Exchange at $6.18.
LSI said a portion of the proceeds of the sale will be used to fund a new $500 million stock buyback plan.
The company formerly known as LSI Logic changed its name to LSI following its merger with Agere Systems last April.