Taiwan’s GlobalWafers Co., the world’s third-largest silicon wafer supplier, has failed to gain regulatory approval from the German government before a deadline to complete an acquisition of its German peer, Siltronic AG.
In a statement issued Tuesday, the company said the deadline for it to obtain approval from Germany’s Federal Ministry for Economic Affairs and Climate Action for its US$4.89-billion takeover of silicon wafer manufacturer Siltronic had expired without action from the ministry.
“We have not been able to obtain the approval from the German government before the long stop date. Based on our efforts to reach a mutually acceptable solution as well as our long and successful history in Europe, this outcome is very disappointing,” Doris Hsu (???), chairwoman and CEO of GlobalWafers, said in a statement issued by the company Tuesday.
“We will analyze the non-decision of the German government and consider its impact on our future investment strategy,” Hsu said.
“This unsuccessful transaction will not impact GlobalWafers’ operations. Europe remains an important market for GlobalWafers and it remains committed to the customers and employees in the region,” the company said in the statement.
“It was not possible to complete all the necessary review steps as part of the investment review — this applies in particular to the review of the antitrust approval by the Chinese authorities, which was only granted last week,” Reuters reported Tuesday, citing a spokesperson for Germany’s economy ministry.
As it has failed to obtain the required regulatory approvals, GlobalWafers said it will pay a termination fee of 50 million euros (US$56 million) to Siltronic as agreed upon in a business combination agreement.
GlobalWafers said it directly holds 13.67 percent of Siltronic shares and there are no specific restrictions on how it can trade those shares in the future.
The approximately 56.60 percent of outstanding Siltronic shares tendered into the all-cash tender offer during the acceptance period will be returned to their original owners without undue delay, expected to be on Feb. 8, according to the company.
GlobalWafers secured more than 50 percent of Siltronic shares last year and the company’s chairwoman Doris Hsu said at the time that the acquisition deal was a milestone in the company’s history and would allow for expanded production and more diverse product lines to better serve its global customer base.
If the acquisition had gone through, the company would have expected to nearly double its production capacity and increase revenues by 75 percent.
Liu Pei-chen (???), an economist at Taiwan Institute of Economic Research (TIER), attributed GlobalWafers’ failed acquisition attempt to the rise of protectionism around the world.
Countries around the world are now wary that their valuable semiconductor supply chain companies could be acquired by companies from a different country, making these acquisitions increasingly more difficult, Liu said.
Despite the failed attempt to acquire Siltronic, GlobalWafers could still grow by increasing its own production capacity or by diversifying its business portfolio, Liu said.
Source: Focus Taiwan News Channel