Infineon buys Savan Communications to solidify DSL market position

Infineon buys Savan Communications to solidify DSL market position
MUNICH -- With its eye on grabbing the lead in the LAN, WAN and broadband access markets, Infineon Technologies AG here today announced it has acquired the Israeli-based broadband communications IC specialist, Savan Communications Ltd.

Savan's VDSL technology, which enables broadband data transmission for the last mile of network access and within local networks, complements Infineon's Communications and Peripherals Division portfolio. Infineon already had a 18.2% stake in Savan and will now acquire the remaining shares in the company, including all intellectual property as well as other assets and operations for a cost of approximately $120 million (about 127 million euros).

The ongoing partnership between Infineon, with its xDSL solutions, and Savan, the VDSL (Very high bitrate Digital Subscriber Line) front-runner, has already helped to define the VDSL ETSI (European Telecommunication Standards Institute) standard. Infineon is focusing on the ISDN arena and expects to become the leading provider of highly integrated xDSL solutions through the acquisition of Savan. All employees of Savan will be transferred to the newly formed company.

Infineon will focus on providing broadband solutions for delivering bundled services such as voice, data, and video based on Savan's VDSL technology and Infineon's capabilities in fiber optics, providing access solutions spanning from routers, LAN switching, VDSL, cable modems and home networking. As fiber deployment gets closer to the subscriber, the number of homes in the range of entertainment quality video services is expected to increase from 6 million today to over 70 million by 2005, according to studies by the Federal Communications Commission and Cahners In-Stat Group.

"By acquiring Savan, Infineon will strongly support the aim of achieving sustainable leadership in the broadband communications market," said Gerhard Geiger, senior vice president and general manager of Infineon's Communication and Peripherals Division. "We will use Savan's experience and the vast know-how of their world class employees in new and emerging markets and in VDSL technology -- for high data rate transmission -- to give us a nucleus for future xDSL development activities."

"Savan has always enjoyed a successful and productive partnership with Infineon. This acquisition allows us to pool our resources and maintain our global market leadership in the VDSL arena and forthcoming technologies," said Noam Alroy, former CEO of Savan, who has been named CEO of Infineon Technologies Savan Ltd., based in Netanya, Israel.