Electronics Production | April 18, 2006
Sale of Epcos' tantalum business closed
EPCOS, one of the world's largest manufacturers of passive electronic components, closed the deal that transfers its tantalum capacitor business to US American capacitor manufacturer KEMET effective April 13, 2006. Now that all relevant regulatory authorities have approved the transaction the closing could be finalized.
The contract of sale between EPCOS and KEMET was signed on December 12, 2005. At that time supplementary agreements were also signed with KEMET to ensure customers an unimpeded supply of tantalum capacitors during a transitional period after closing. Under these agreements EPCOS will continue to be responsible for the sales of the products and caring for the customers of tantalum capacitors until they are gradually transferred to the KEMET sales organization. Moreover, EPCOS will continue to produce tantalum products on behalf of KEMET in Heidenheim, Germany, well into the second half of 2006. The selling price for EPCOS' tantalum business is EUR 86.5 million. The sale will give EPCOS an expected cash inflow totaling EUR 70 million, the bulk of which will be paid in the current (third) quarter of fiscal 2006. The main difference between the selling price and the cash inflow is a discount on the selling price for the assumption of parts of the debt of the tantalum capacitor plant in Portugal as well as for severance payments and other personnel costs. "By selling our tantalum business, we have eliminated the company's biggest loss-maker," said EPCOS President and CEO Gerhard Pegam. "This step makes EPCOS a more profitable and globally competitive company."