GlobalWafers’ Siltronic deal fails as Germany misses deadline

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A scientist presents a silicon wafer during a media presentation in one of the low particulate pollution nanofabrication clean rooms at the Swiss Federal Institute of Technology (EPFL) in Ecublens, near Lausanne, May 16, 2011. REUTERS /Valentin Flauraud

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  • German Economy Ministry does not complete review of deal
  • A deal would have created a global wafer giant
  • Siltronic shares up 1.8%

BERLIN, Feb 1 (Reuters) – GlobalWafers (6488.TWO)’s planned 4.35 billion euro ($4.89 billion) takeover of German chip supplier Siltronic collapsed on Monday evening, the deal not having received regulatory approval in time, although the door was left open for another attempt.

GlobalWafers’ failed acquisition of Taiwan comes as a global shortage of semiconductors has laid bare Europe’s dependence on Asian suppliers, sparking recent efforts to boost production across the continent.

“It has not been possible to complete all the necessary review steps within the framework of the investment review – this applies in particular to the review of the antitrust approval by the Chinese authorities, which n ‘was granted only last week,” said a spokesman for the German Ministry of Economics. .

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On January 21, China’s market regulator announced that it would give conditional approval for the acquisition. Read more

GlobalWafers left the door open on whether it would make another bid, retracting an earlier statement on Tuesday in which it ruled out making another attempt.

Still, Siltronic CEO Christoph von Plotho told German newspaper FAZ that an unchanged offer would be less attractive at this stage.

“A lot has changed. Chips are scarce and prices are going up,” he said, according to a preview of Wednesday’s edition of the newspaper, adding that the business was operating at full capacity.

“An unchanged offer is less attractive from today’s perspective.”

Siltronic shares were up 4.8% at 1126 GMT. Siltronic shares had been trading significantly below GlobalWafers’ offer price of 145 euros per share for some time after Siltronic reported in mid-January that the deal was in limbo. Read more

A trader said any sell-offs by disappointed investors could offer an entry point, given that Siltronic could be worth more as a stand-alone business.

“Some analysts already updated the stock when approval became unlikely,” the trader said.

Germany’s economy ministry, which has intensified reviews of planned takeovers of German companies by foreign companies in recent years, said an investment review would be carried out again if GlobalWafers chose to make another attempt. acquisition.

‘SIGNIFICANT MARKET’

GlobalWafers CEO Doris Hsu said the result was “very disappointing” and the company would “analyze the German government’s non-decision and consider its impact on our future investment strategy.”

Hsu said she would announce on February 6 the company’s plans for the estimated 4.35 billion euros it would have cost to purchase Siltronic. Hsu had earlier said the company would likely invest in America if the deal fell through.

“Europe remains an important market for GlobalWafers and it remains committed to customers and employees in the region,” the company said in a statement, adding that it would have to pay a termination fee of 50 million euros since regulatory approvals have not been obtained.

In a separate statement, Siltronic confirmed that the tender offer had expired due to the inaction of the German ministry and that the company was at risk of receiving termination fees.

Majority shareholder Wacker Chemie (WCHG.DE), which has a 30.83% stake in Siltronic, said it regretted the economy ministry’s decision, adding it still intended to sell its remaining stake in Siltronic in the medium term.

The deal would have created the second-largest maker of 300-millimeter wafers, behind Japan’s Shin-Etsu (4063.T), as the semiconductor industry consolidates.

Germany has been wary of changes to its high-tech supply network after automakers, one of its key sectors, were hit by global chip shortages.

A recent takeover of a European semiconductor company by an Asian buyer that materialized was the purchase of Dialog Semiconductor by Japanese Renesas Electronics Corp (6723.T).

GlobalWafers secured a majority stake in Siltronic last year and initially hoped to complete the transaction in late 2021.

($1 = 0.8896 euros)

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Reporting by Andreas Rinke, Alexander Huebner, Riham Alkousaa and Ludwig Burger; Additional reporting by Christoph Steitz; Editing by Robert Birsel and Bernadette Baum

Our standards: The Thomson Reuters Trust Principles.

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