German chip maker Infineon Technologies AG says it has agreed to pay $3 billion in cash for California-based International Rectifier, which produces power-management components used in everything from cars to satellites.

Infineon said in Wednesday's announcement that it's paying $40 per share for El Segundo-based International Rectifier. The deal has been approved by both boards, but must win regulatory permission and meet the approval of International Rectifier shareholders.

Infineon, based in Munich, has 26,700 employees and makes chips for a wide variety of products including cars, medical equipment and mobile devices. It says combining with International Rectifier will increase the scale and efficiency of its own power-management business.

International Rectifier was founded in 1947 and has 4,160 employees.