BN 06/08 10:01 *INTEGRATED SILICON SAYS CYPRESS RECEIVED DRAFT PACT ON JUNE 5
BFW 06/08 10:00 *CYPRESS FAILS TO FINALIZE MERGER PACT W/ ISSI
BN 06/08 10:00 *CYPRESS FAILS TO FINALIZE MERGER PACT W/ ISSI
BFW 06/08 10:00 *CYPRESS FAILS TO FINALIZE MERGER PACT W/ ISSI
BN 06/08 10:00 *CYPRESS FAILS TO FINALIZE MERGER PACT W/ ISSI
Cypress Fails to Finalize Merger Agreement with ISSI
2015-06-08 10:00:09.954 GMT
Cypress Fails to Finalize Merger Agreement with ISSI
PR Newswire
MILPITAS, Calif., June 8, 2015
MILPITAS, Calif., June 8, 2015 /PRNewswire/ -- Integrated Silicon Solution,
Inc. (NASDAQ: ISSI) today announced that Cypress Semiconductor ("Cypress") has
failed to finalize a merger agreement by the deadline of June 7, 2015 imposed
by Cypress, even after Cypress received the negotiated draft agreement from
ISSI on Friday, June 5, 2015.
As a result of ISSI's full cooperation, Cypress was able to complete extensive
due diligence and hold numerous meetings with ISSI's management team. Also, a
merger agreement has been nearly fully negotiated with the only remaining
point of difference being the treatment of the antitrust risks of the
transaction. ISSI filed an amendment to its proxy statement with the SEC on
Friday, June 5, 2015 which further describes the due diligence process with
Cypress and the deliberations of the ISSI board of directors. While Cypress
has repeatedly downplayed antitrust concerns in its press releases, ISSI
believes a transaction with Cypress presents significant antitrust risks in
both the U.S. and Germany. As such, ISSI believes a transaction with Cypress
would be unlikely to close without substantial divestitures or other actions
required by antitrust authorities.
If Cypress had agreed to provide ISSI with protection against this antitrust
risk, ISSI would have been in a position to finalize a merger agreement with
Cypress this past weekend.
ISSI is disappointed that Cypress is not willing to agree to take all
necessary actions to ensure receipt of antitrust clearance. Cypress has
consistently downplayed the antitrust risks in its public statements. If
Cypress truly believes that the transaction does not present significant
antitrust concerns then it should be willing to provide the contractual
commitment that the ISSI Board believes is in the best interests of its
stockholders. By refusing to agree to the ISSI language, Cypress is placing
ISSI's stockholders and the transaction closing at risk by creating an
opportunity for Cypress to walk away from the deal if it does not receive a
favorable antitrust decision. ISSI has made it clear to Cypress that the
objective of the ISSI Board is to obtain the highest price for ISSI
stockholders consistent with its fiduciary duties under applicable law.
Therefore, ISSI would be prepared to immediately move forward with an
agreement in compliance with the Uphill merger agreement, if Cypress were to
commit to ensure a successful closing for ISSI stockholders.
Cypress Antitrust Issues
With respect to the anti-trust filings for a Cypress transaction, ISSI has
determined that filings would be required in the U.S. and Germany and possibly
other jurisdictions. In the U.S., the anti-trust agencies (the Federal Trade
Commission (FTC) and the Department of Justice (DOJ)) have 30 days to review a
filing and determine whether to issue the parties a burdensome subpoena for
documents and information called a second request. ISSI believes there is a
significant risk of a second request since Cypress and ISSI are head to head
competitors with significant market share in the SRAM market. A second
request investigation could cost each party over $3 million, take up to 9
months to complete, and result in divestiture of at least a portion of the
SRAM business. In the U.S., the anti-trust agencies will issue a second
request if there is any evidence that suggests that the acquisition may
substantially lessen competition in any relevant market and such agencies are
virtually certain to issue a second request for a transaction that reduces the
number of meaningful competitors in a market from 4 to 3 or 3 to 2. ISSI
believes that the FTC/DOJ would likely issue a second request with respect to
a transaction with Cypress since Cypress and ISSI are the only full-suite
providers of SRAM in the world. Other smaller competitors are limited in
scope and geography. Specifically, Cypress and ISSI combined would have a
total market share in the U.S. of over 80%, have over 90% share at the largest
electronics distributor in the U.S., and would be the only supplier of SRAM to
the automotive industry. The FTC/DOJ rarely close a second request
investigation without conditions. For example, in the last fiscal year, the
FTC/DOJ issued 25 second requests and ordered remedies or challenged 23 of
those transactions. If the parties have high market shares for certain
products and barriers to entry are significant, the FTC/DOJ would likely
require divestiture of certain products and customers.
In Germany, ISSI believes the combined market share of Cypress and ISSI would
exceed 70% share and that the combined company would be the sole supplier of
SRAM to German automotive manufacturers. The German antitrust agency, The
Bundeskartllamt, also has 30 days to review the proposed merger and, if it
determines further examination is necessary, a formal main examination is
initiated, which could take an additional three months. ISSI believes there
is significant risk that The Bundeskartllamt would initiate a main examination
and that, similar to the FTC/DOJ, it would require divestiture of certain
products and customers.
Cypress has argued because the SRAM market has been moving to embedded SRAM
from standalone SRAM, and since Cypress and ISSI are not major suppliers of
embedded SRAM, the proposed transaction does not present any anti-trust risk.
However, ISSI believes that there is a substantial chance that the agencies
would conclude otherwise. First, sales of standalone SRAM are still several
hundred millions of dollars annually and the standalone SRAM market is
unlikely to disappear in the next 5 to 10 years; because there is substantial
demand for standalone SRAM, the agencies may conclude that it is in a market
distinct from a market for embedded SRAM. Second, the antitrust agencies may
conclude that customers that require standalone SRAM cannot easily substitute
it with embedded SRAM without significant redesign costs, if even possible.
As a result, it is likely that the FTC will closely investigate whether
standalone SRAM is in a market separate from embedded SRAM, and whether
embedded SRAM acts as a price constraint for standalone SRAM for all
customers, or whether for some customers, embedded SRAM does not constrain the
demand or price for standalone SRAM. If the antitrust agencies do not agree
with Cypress, there is a high likelihood that they will demand a divestiture
of one of the parties' SRAM businesses.
The recent actions of Cypress illustrate their knowledge of the significant
risk of these anti-trust issues. They have proposed the use of an ineffective
"side letter" and surprisingly settled a long running anti-trust lawsuit
against it by another SRAM competitor just one week before announcing its
non-binding offer for ISSI. Due to the significant anti-trust risks, ISSI
proposed to Cypress that under any merger agreement Cypress must take "all
necessary actions" to comply with anti-trust rulings in order to close the
transaction. This would eliminate antitrust matters as a condition for
closing. However, despite their claims that anti-trust is not a significant
issue, Cypress would only agree to take "all reasonable actions," which would
mean that if Cypress did not like the decisions of the antitrust agencies they
could walk away from the deal. Clearly, Cypress' position is not in the best
interest of ISSI's stockholders, and could not be accepted, since a merger
closing would be highly uncertain.
About ISSI
ISSI is a fabless semiconductor company that designs and markets high
performance integrated circuits for the following key markets: (i) automotive,
(ii) communications, (iii) industrial, and (iv) digital consumer. ISSI's
primary products are high speed and low power SRAM and low, and medium and
high density DRAM. ISSI also designs and markets NOR flash products and high
performance analog and mixed signal integrated circuits. ISSI is headquartered
in Silicon Valley with worldwide offices in Taiwan, Japan, Singapore, China,
Europe, Hong Kong, India, and Korea. Visit ISSI's web site at www.issi.com.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Statements concerning
ISSI's belief that a transaction with Cypress presents significant anti-trust
risks in both the U.S. and Germany and that a transaction with Cypress would
be unlikely to close without substantial divestitures or other actions
required by antitrust authorities, ISSI's belief that the FTC/DOJ would be
highly likely to issue a second request and ISSI's belief that there is
significant risk that The Bundeskartllamt would initiate a main examination
and that, similar to the FTC/DOJ, would require divestiture of certain
products and customers due to the high concentration of market share under the
proposed transaction are forward-looking statements that involve risks and
uncertainties that could cause actual results to differ materially from those
anticipated. Such risks and uncertainties include the outcome and timing of
any initial review and second request or further review or action by antitrust
agencies in the U.S. and Germany, the satisfaction of the other closing
conditions to any transaction, the outcome of any existing or future
litigation involving the acquisition transaction or other risks listed from
time to time in ISSI's filings with the SEC, including ISSI's Form 10-K for
the year ended September 30, 2014 and Form 10-Q for the quarter ended March
31, 2015. ISSI assumes no obligation to update or revise the forward-looking
statements in this press release because of new information, future events, or
otherwise.
Additional Information and Where to Find It
In connection with the Uphill Merger Agreement and the merger contemplated
thereunder, ISSI filed with the SEC a Schedule 14A containing a Proxy
Statement and other relevant materials. The Proxy Statement was mailed on or
about April 30, 2015 to ISSI's stockholders of record as of April 20, 2015. An
amendment to the proxy materials was filed with the SEC on June 5, 2015.
Stockholders may obtain, free of charge, copies of the definitive proxy
statement, the amendment to the definitive proxy statement and any other
documents filed by ISSI with the SEC in connection with the Special Meeting at
the SEC's website (http://www.sec.gov), at ISSI's website
(http://www.issi.com) or by writing to Investor Relations, Integrated Silicon
Solution, Inc., 1623 Buckeye Drive, Milpitas, CA 95035.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/cypress-fails-to-finalize-merger-agreement-with-issi-300095329.html
SOURCE Integrated Silicon Solution, Inc.
Website: http://www.issi.com
Contact: John M. Cobb, Chief Financial Officer, Investor Relations, (408)
969-6600, ir@issi.com; Shelton Group, Leanne Sievers, EVP, P: 949-224-3874, E:
lsievers@sheltongroup.com; Matt Kreps, Managing Director, P: 214-272-0073, E:
mkreps@sheltongroup.com
-0- Jun/08/2015 10:00 GMT
2015-06-08 10:00:09.954 GMT
Cypress Fails to Finalize Merger Agreement with ISSI
PR Newswire
MILPITAS, Calif., June 8, 2015
MILPITAS, Calif., June 8, 2015 /PRNewswire/ -- Integrated Silicon Solution,
Inc. (NASDAQ: ISSI) today announced that Cypress Semiconductor ("Cypress") has
failed to finalize a merger agreement by the deadline of June 7, 2015 imposed
by Cypress, even after Cypress received the negotiated draft agreement from
ISSI on Friday, June 5, 2015.
As a result of ISSI's full cooperation, Cypress was able to complete extensive
due diligence and hold numerous meetings with ISSI's management team. Also, a
merger agreement has been nearly fully negotiated with the only remaining
point of difference being the treatment of the antitrust risks of the
transaction. ISSI filed an amendment to its proxy statement with the SEC on
Friday, June 5, 2015 which further describes the due diligence process with
Cypress and the deliberations of the ISSI board of directors. While Cypress
has repeatedly downplayed antitrust concerns in its press releases, ISSI
believes a transaction with Cypress presents significant antitrust risks in
both the U.S. and Germany. As such, ISSI believes a transaction with Cypress
would be unlikely to close without substantial divestitures or other actions
required by antitrust authorities.
If Cypress had agreed to provide ISSI with protection against this antitrust
risk, ISSI would have been in a position to finalize a merger agreement with
Cypress this past weekend.
ISSI is disappointed that Cypress is not willing to agree to take all
necessary actions to ensure receipt of antitrust clearance. Cypress has
consistently downplayed the antitrust risks in its public statements. If
Cypress truly believes that the transaction does not present significant
antitrust concerns then it should be willing to provide the contractual
commitment that the ISSI Board believes is in the best interests of its
stockholders. By refusing to agree to the ISSI language, Cypress is placing
ISSI's stockholders and the transaction closing at risk by creating an
opportunity for Cypress to walk away from the deal if it does not receive a
favorable antitrust decision. ISSI has made it clear to Cypress that the
objective of the ISSI Board is to obtain the highest price for ISSI
stockholders consistent with its fiduciary duties under applicable law.
Therefore, ISSI would be prepared to immediately move forward with an
agreement in compliance with the Uphill merger agreement, if Cypress were to
commit to ensure a successful closing for ISSI stockholders.
Cypress Antitrust Issues
With respect to the anti-trust filings for a Cypress transaction, ISSI has
determined that filings would be required in the U.S. and Germany and possibly
other jurisdictions. In the U.S., the anti-trust agencies (the Federal Trade
Commission (FTC) and the Department of Justice (DOJ)) have 30 days to review a
filing and determine whether to issue the parties a burdensome subpoena for
documents and information called a second request. ISSI believes there is a
significant risk of a second request since Cypress and ISSI are head to head
competitors with significant market share in the SRAM market. A second
request investigation could cost each party over $3 million, take up to 9
months to complete, and result in divestiture of at least a portion of the
SRAM business. In the U.S., the anti-trust agencies will issue a second
request if there is any evidence that suggests that the acquisition may
substantially lessen competition in any relevant market and such agencies are
virtually certain to issue a second request for a transaction that reduces the
number of meaningful competitors in a market from 4 to 3 or 3 to 2. ISSI
believes that the FTC/DOJ would likely issue a second request with respect to
a transaction with Cypress since Cypress and ISSI are the only full-suite
providers of SRAM in the world. Other smaller competitors are limited in
scope and geography. Specifically, Cypress and ISSI combined would have a
total market share in the U.S. of over 80%, have over 90% share at the largest
electronics distributor in the U.S., and would be the only supplier of SRAM to
the automotive industry. The FTC/DOJ rarely close a second request
investigation without conditions. For example, in the last fiscal year, the
FTC/DOJ issued 25 second requests and ordered remedies or challenged 23 of
those transactions. If the parties have high market shares for certain
products and barriers to entry are significant, the FTC/DOJ would likely
require divestiture of certain products and customers.
In Germany, ISSI believes the combined market share of Cypress and ISSI would
exceed 70% share and that the combined company would be the sole supplier of
SRAM to German automotive manufacturers. The German antitrust agency, The
Bundeskartllamt, also has 30 days to review the proposed merger and, if it
determines further examination is necessary, a formal main examination is
initiated, which could take an additional three months. ISSI believes there
is significant risk that The Bundeskartllamt would initiate a main examination
and that, similar to the FTC/DOJ, it would require divestiture of certain
products and customers.
Cypress has argued because the SRAM market has been moving to embedded SRAM
from standalone SRAM, and since Cypress and ISSI are not major suppliers of
embedded SRAM, the proposed transaction does not present any anti-trust risk.
However, ISSI believes that there is a substantial chance that the agencies
would conclude otherwise. First, sales of standalone SRAM are still several
hundred millions of dollars annually and the standalone SRAM market is
unlikely to disappear in the next 5 to 10 years; because there is substantial
demand for standalone SRAM, the agencies may conclude that it is in a market
distinct from a market for embedded SRAM. Second, the antitrust agencies may
conclude that customers that require standalone SRAM cannot easily substitute
it with embedded SRAM without significant redesign costs, if even possible.
As a result, it is likely that the FTC will closely investigate whether
standalone SRAM is in a market separate from embedded SRAM, and whether
embedded SRAM acts as a price constraint for standalone SRAM for all
customers, or whether for some customers, embedded SRAM does not constrain the
demand or price for standalone SRAM. If the antitrust agencies do not agree
with Cypress, there is a high likelihood that they will demand a divestiture
of one of the parties' SRAM businesses.
The recent actions of Cypress illustrate their knowledge of the significant
risk of these anti-trust issues. They have proposed the use of an ineffective
"side letter" and surprisingly settled a long running anti-trust lawsuit
against it by another SRAM competitor just one week before announcing its
non-binding offer for ISSI. Due to the significant anti-trust risks, ISSI
proposed to Cypress that under any merger agreement Cypress must take "all
necessary actions" to comply with anti-trust rulings in order to close the
transaction. This would eliminate antitrust matters as a condition for
closing. However, despite their claims that anti-trust is not a significant
issue, Cypress would only agree to take "all reasonable actions," which would
mean that if Cypress did not like the decisions of the antitrust agencies they
could walk away from the deal. Clearly, Cypress' position is not in the best
interest of ISSI's stockholders, and could not be accepted, since a merger
closing would be highly uncertain.
About ISSI
ISSI is a fabless semiconductor company that designs and markets high
performance integrated circuits for the following key markets: (i) automotive,
(ii) communications, (iii) industrial, and (iv) digital consumer. ISSI's
primary products are high speed and low power SRAM and low, and medium and
high density DRAM. ISSI also designs and markets NOR flash products and high
performance analog and mixed signal integrated circuits. ISSI is headquartered
in Silicon Valley with worldwide offices in Taiwan, Japan, Singapore, China,
Europe, Hong Kong, India, and Korea. Visit ISSI's web site at www.issi.com.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Statements concerning
ISSI's belief that a transaction with Cypress presents significant anti-trust
risks in both the U.S. and Germany and that a transaction with Cypress would
be unlikely to close without substantial divestitures or other actions
required by antitrust authorities, ISSI's belief that the FTC/DOJ would be
highly likely to issue a second request and ISSI's belief that there is
significant risk that The Bundeskartllamt would initiate a main examination
and that, similar to the FTC/DOJ, would require divestiture of certain
products and customers due to the high concentration of market share under the
proposed transaction are forward-looking statements that involve risks and
uncertainties that could cause actual results to differ materially from those
anticipated. Such risks and uncertainties include the outcome and timing of
any initial review and second request or further review or action by antitrust
agencies in the U.S. and Germany, the satisfaction of the other closing
conditions to any transaction, the outcome of any existing or future
litigation involving the acquisition transaction or other risks listed from
time to time in ISSI's filings with the SEC, including ISSI's Form 10-K for
the year ended September 30, 2014 and Form 10-Q for the quarter ended March
31, 2015. ISSI assumes no obligation to update or revise the forward-looking
statements in this press release because of new information, future events, or
otherwise.
Additional Information and Where to Find It
In connection with the Uphill Merger Agreement and the merger contemplated
thereunder, ISSI filed with the SEC a Schedule 14A containing a Proxy
Statement and other relevant materials. The Proxy Statement was mailed on or
about April 30, 2015 to ISSI's stockholders of record as of April 20, 2015. An
amendment to the proxy materials was filed with the SEC on June 5, 2015.
Stockholders may obtain, free of charge, copies of the definitive proxy
statement, the amendment to the definitive proxy statement and any other
documents filed by ISSI with the SEC in connection with the Special Meeting at
the SEC's website (http://www.sec.gov), at ISSI's website
(http://www.issi.com) or by writing to Investor Relations, Integrated Silicon
Solution, Inc., 1623 Buckeye Drive, Milpitas, CA 95035.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/cypress-fails-to-finalize-merger-agreement-with-issi-300095329.html
SOURCE Integrated Silicon Solution, Inc.
Website: http://www.issi.com
Contact: John M. Cobb, Chief Financial Officer, Investor Relations, (408)
969-6600, ir@issi.com; Shelton Group, Leanne Sievers, EVP, P: 949-224-3874, E:
lsievers@sheltongroup.com; Matt Kreps, Managing Director, P: 214-272-0073, E:
mkreps@sheltongroup.com
-0- Jun/08/2015 10:00 GMT