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ASE-Siliconware deal approved by German authorities

ASE-Siliconware deal approved by German authorities

A deal for integrated circuit packaging and testing services provider Advanced Semiconductor Engineering Inc. (ASE) to acquire Siliconware Precision Industries Co. has been approved by anti-trust authorities in Germany.

ASE said that the Federal Cartel Office in Germany has issued a green light for the acquisition deal, saying that the combination with Siliconware will not violate anti-competition rules in the German market.

Germany was the second country to issue such approval for the ASE-Siliconware deal after anti-trust authorities in South Korea gave the nod to the acquisition plan in November, ASE said.

ASE completed the first tender offer to acquire a 25 percent stake in Siliconware in early October to become the largest shareholder of Siliconware. ASE launched the second one from Dec. 29, to acquire an additional 24.71 percent stake in Siliconware to boost its holding to 49.71 percent.

ASE said that after completing the second tender offer, it aims to acquire the remaining stake in Siliconware to take the company totally under its corporate umbrella. Then, Siliconware will be delisted from the local main board.

As ASE and Siliconware are the largest and third-largest IC packaging and testing firms in the world, respectively, their combination has raised concerns over possible violation of anti-trust laws.

ASE said that it has also filed an application with Taiwan's Fair Trade Commission (FTC) and another application with anti-trust authorities in China for approval for its combination with Siliconware, but no responses have been forthcoming. ASE said that it is planning to seek approval from the United States for the acquisition deal.

The FTC said that it received the application from ASE Dec. 28, saying that the commission is likely to take 90 days at the longest to complete the review. As the second tender offer for ASE to acquire a 24.71 percent stake in Siliconware is scheduled to be completed by Feb. 16, it could extend the tender offer after the deadline, while waiting for a response from the FTC.

Siliconware has warned investors of possible risks resulting from anti-trust concerns, saying that major clients of ASE and Siliconware could shift their orders to a third company in a bid to diversify their supplier portfolios, which could cause NT$30 billion (US$891 million) in losses for both ASE and Siliconware.

In the second tender offer, ASE set an acquisition price of NT$55 for each Siliconware share. Siliconware said that the price is too low, adding that a fair price will range between NT$56.33 and NT$68.6.

After obtaining approval from Germany for the deal, shares of ASE rose 1.44 percent to close at NT$35.15 on the Taiwan Stock Exchange Tuesday.

Updated : 2022-01-17 08:26 GMT+08:00