'Internet of things' chipmakers in $4bn merger deal

San Francisco - Chipmakers Cypress Semiconductor and Spansion announced plans to merge Monday in a $4bn deal bringing together two key makers of components for "internet of things" devices.

The all-stock deal brings together Cypress, which is known for chips controlling touch screen devices, and Spansion, a major maker of chips for the automotive and industrial control market.

"This merger represents the combination of two smart, profitable, passionately entrepreneurial companies that are number one in their respective memory markets and have successfully diversified into embedded processing," said TJ Rodgers, the Cypress founding president who will be chief executive of the new group.

Spansion shareholders will receive 2.457 Cypress shares for each share they own, resulting in shareholders of each company holding 50% of the post-merger company.

The company will have an eight-person board of directors consisting of four directors from each firm. Ray Bingham, the Spansion chairman, will serve as the non-executive chairman.

Subject to regulatory approval, the deal creates a new firm to be headquartered in San Jose, California, and called Cypress Semiconductor Corporation.