Cypress Semiconductor News: CY Stock drops 15% on potential block of Infineon Deal

<p>Cypress Semiconductor (NASDAQ: CY) news for Friday about a potential obstacle to the deal with Infineon Technologies has reduced the CY stock.

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The deal between the two companies would lead Infineon Technologies to acquire Cypress Semiconductor. This would have had it to pick up the company for $ 8.7 billion. The problem stems from regulators.

According to internal sources in contact with Bloomberg, US national security authorities are proposing that President Donald Trump should close the deal. Sources in the news about Cypress Semiconductor claim that the deal poses a national security risk.

These internal sources claim that Infineon Technologies has worked to move the business forward. This includes attempts to negotiate with the government. However, these attempts seem to have failed.

It is still unknown why the national security authorities want to get in the way of the deal. Still, there are some possible causes. One of these has to do with Infineon Technologies connections. While the company is based in Germany, much of its revenue comes from China, to which officials are reluctant to hand over American technology.

Cypress Semiconductor and Infineon Technologies have been working on this business for a long time. The news about Cypress Semiconductor was originally announced in June 2019. At that time, companies said they expected it to close in late 2019 or early 2020. If the Bloomberg reports are true, it looks like that range will be missing.

The CY share fell by 14.65% as of Friday afternoon.

At the time of writing, William White had no position in any of the above securities.