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ASE, SPIL in talks to form holding company

ASE, SPIL in talks to form holding company

Advanced Semiconductor Engineering Inc. (ASE) and Siliconware Precision Industries Co. (SPIL), Taiwan's two biggest integrated circuit packaging and testing services providers, said Tuesday they are in talks to form a holding company.

ASE said it has exchanged views with SPIL on the possibility and added that if a consensus on the idea is reached and ASE obtains approval from its board of directors, it will make an official announcement on the matter.

For its part, SPIL said talks with ASE are underway but stressed that there was no guarantee the negotiations would achieve a consensus on forming a holding company in the future.

The statements made by ASE and Siliconware came after local media reported on Tuesday that the two companies are expected to announce by the end of this week that they will set up a holding company.

The reports said the future holding company will go public on the tech-heavy Nasdaq in the United States.

Shares of ASE and SPIL got a boost on the Taiwan Stock Exchange Tuesday on hopes that they would soon announce the deal.

ASE rose 3.84 percent to close at NT$32.45 (US$0.99) and SPIL gained 2.46 percent to close at NT$50.00, while the market's broader weighted index finished 0.52 percent lower at 8,300.66.

The reports said a listing on the Nasdaq could help the future holding company gain easier access to funding because valuations on the U.S. market are generally higher than those on Taiwan's market.

The reports said the funding would support the holding company's expansion in the future and strengthen its competitive edge at a time when China is cultivating its own semiconductor industry, a move seen as a threat to Taiwan's IC sector.

ASE currently holds a 33.29 percent stake in SPIL and is its rival's largest shareholder.

ASE completed a tender offer to take a 25 percent stake SPIL in early October and then proposed a second tender offer in December to raise its stake to 49.71 percent, but that bid failed in mid-March when Taiwanese authorities did not approve the move ahead of the March 17 deadline because of anti-trust concerns.

Despite the aborted tender offer, ASE continued to acquire SPIL shares in late March to boost its stake in SPIL to 33.29 percent.

As long as ASE's stake in SPIL remained below 33 percent, it was not required to seek approval for its acquisition of shares from Taiwan's Fair Trade Commission (FTC).

ASE had previously insisted it would form a holding company consisting of ASE and SPIL after acquiring a 100 percent stake in SPIL.

SPIL's management had previously described ASE's tender offer as a hostile takeover attempt and urged its shareholders to oppose any ASE bid to get a higher stake in SPIL, but the company now seems to have softened its stance on ASE's acquisition.

At the SPIL annual general meeting on May 16, ASE voted in favor of all proposals submitted by SPIL to show its support for the management.

Immediately after the shareholder meeting, SPIL Chairman Bough Lin said that as long as a consensus was reached through negotiations, it would be possible for the two sides to set up a holding company. (Jalen Chung and Frances Huang)

Updated : 2021-04-24 01:28 GMT+08:00