* Infineon says $40 per share offer for U.S. firm is all-cash
* Says deal to begin to boost Infineon earnings by end of 1st yr
* Says margin improvements will show up in second yr after closing (Recasts with Reuters source, adds U.S. share prices, details)
By Alexander Hübner
FRANKFURT, Aug 20 (Reuters) - Merger-shy German chipmaker Infineon has agreed to buy Silicon Valley-based International Rectifier for about $3 billion in cash, Infineon said on Wednesday, in its biggest-ever acquisition.
Terms call for it to pay $40 per share for the U.S. company, a maker of power-supply chips. The deal has been approved by International Rectifier’s board and is expected to close late in 2014 or early in 2015, subject to regulatory approvals, Infineon said.
Shares of International Rectifier rose to $39.15 following the news, a gain of $12.59 or 47 percent on the day on the New York Stock Exchange.
Infineon shares had closed down 1.38 percent ahead of the announcement. Its shares had dipped, while those of several possible targets rose, following reports that the Munich-based firm was preparing to buy a U.S. chipmaker.
Infineon said the acquisition is expected to start boosting its reported earnings per share by the end of the fiscal year in which the deal closes.
Based on International Rectifier’s current restructuring of operations, it added that in the second full fiscal year after closing International Rectifier’s profit margins would be “at least in line with” Infineon’s projected multi-year margin targets of 15 percent.
Infineon, whose chips activate car airbags, enable cruise control, manage power supplies and cut vehicle emissions, has shunned major takeovers since it was spun off from engineering conglomerate Siemens in 1999, as it struggled for years to turn a profit at a memory-chip unit it previously owned.
$1 = 0.7528 euro Reporting by Alexander Huebner; Writing by Maria Sheahan in Frankfurt and Eric Auchard in Vienna; Additional reporting by Joern Poltz in Munich, Victoria Bryan in Berlin and Supantha Mukherjee in Bangalore; Editing by Victoria Bryan and Pravin Char