Sistema Financial Corp. said on Thursday that it had dropped plans to acquire a stake in Infineon AG and its daughter companies, such as Altis Semiconductor or Qimonda AG. The company will not buy stakes under any conditions, even if government-controlled banks propose appropriate loans.

“Sistema Joint-Stock Financial Corp. has dropped the idea of acquiring a stake in German-based semiconductor maker Infineon. We do not plan to acquire Infineon’s assets either for our own or for loaned capital,” said Anton Abugov, vice-president for strategy at Sistema, reports Kommersant news-paper.

In August it was reported that Sistema could acquire a stake in Infineon for the capital provided by one of the banks that is controlled by the government of the Russian Federation. In fact, the chancellor of Germany and the president of the Russian Federation confirmed discussions regarding potential strategic partnership in the field of microelectronics as well as possible investments into chipmaker Infineon AG and its daughter company Qimonda AG.

According to the initial plan of Sistema and the government of Russia, the former would acquire 51% stake in Infineon for €2 billion loaned from State Corporation Bank for Development and Foreign Economic Affairs. However, the German government offered 15% - 20% of Infineon for $1 billion, whereas French investors proposed Altis Semiconductor, 50% of which belongs to Infineon. Sistema was not interested in 20% of Infineon and Altis Semiconductor and decided to cancel the deal.

Infineon badly needs money these days. Earlier this year it applied for state aid. Besides, Infineon owns 77.5% stake in Qimonda, the maker of dynamic random access memory that filed for insolvency early this year, which is being liquidated. Meanwhile, Russia-based companies need access to modern technologies and would be interested in acquiring a stake in high-tech companies.

Tags: Infineon, Qimonda, Sistema, Semiconductor, Business