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Hon Hai chairman downplays synergies of ASE-Siliconware tie-up

Hon Hai chairman downplays synergies of ASE-Siliconware tie-up

Taipei, Sept. 22 (CNA) The chairman of Taiwan's Hon Hai Precision Industry Co. (??) said Tuesday that there would be fewer synergies between Taiwan's two leading integrated circuit packaging and testing services providers than expected because of overlapping customers. Terry Gou (???) said the tender offer by Advanced Semiconductor Engineering Inc. (ASE, ???), the world's largest IC packaging house, to buy up to a 25 percent stake in rival Siliconware Precision Industries Co. (??) would only be a "horizontal integration" given that 85 percent of the two companies' customers overlap. "If their tie-up made one plus one more than two, I would write my last name Gou backwards," Gou told reporters on the sidelines of the 12th cross-strait forum on technical standards for information technology, which was held at a hotel in New Taipei. Gou made his remarks four days after ASE acquired a more than 5 percent stake in Siliconware. That meant that ASE has met the minimum requirement under Taiwanese law to allow the tender offer to proceed and continue to buy Siliconware shares on the open market to achieve the goal of owning up to a 25 percent stake in the smaller rival. ASE's tender offer, which was announced on Aug. 21, kicked off on Aug. 24 and will run through Sept. 22. While ASE said the acquisition was simply a financial investment and promised not to intervene in Siliconware's operations, the Siliconware management has repeatedly said the tender offer was the first step in a hostile takeover bid, and it urged its shareholders not to sell their shares to ASE. To counter ASE's interest, Siliconware announced on Aug. 28 that it and Hon Hai, the world's largest contract electronics maker also known as the Foxconn Technology Group (???), would set up a new partnership by conducting a stock swap through the issuance of new shares. After the stock swap, Hon Hai will hold a 21.24 percent stake in Siliconware to become the latter's largest shareholder, while Siliconware will hold a 2.2 percent stake in Hon Hai. As a result, even if ASE manages to acquire the number of Siliconware shares it wants to buy, its stake in the company will be diluted to a level of less than 20 percent. (By Jeffrey Wu)


Updated : 2021-04-21 11:25 GMT+08:00