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Taiwan Chip Firm’s Bid To Buy German Rival Collapses

The demise of GlobalWafers’ $4.5bn bid to buy Siltronic was welcomed by German politicians, who said the country had to protect its security interests


US senators have backed move setting to set up votes on a semiconductor bill to provide billions in subsidies and tax credits for the sector.
Workers at a UK chip company say they prefer the new owners of their company. The British government is reviewing the takeover of the firm because the parent company that bought Newport is Chinese. File photo: Lim Huey Teng, Reuters.

 

A Taiwanese semiconductor technology company’s $4.5 billion deal to acquire a German rival collapsed on Tuesday after a deadline for Berlin to approve the bid passed without a decision.

The demise of GlobalWafers‘ attempt to buy Siltronic was welcomed by German politicians, who said the country had to protect its security interests.

The Taiwanese firm makes wafers, one-millimetre-thick sheets of silicon necessary for the manufacturing of semiconductors that are the backbone of the global technology sector.

GlobalWafers had signed an agreement with Siltronic in December 2020 to acquire all of the German company’s outstanding shares at a 10% premium worth roughly $4.5 billion (4.0 billion euros).

But the deal needed regulatory approval from Berlin, which was not obtained by the January 31 deadline.

“Therefore, the takeover offer by GlobalWafers and the agreements which came into existence as a result of the offer will not be completed and will lapse,” GlobalWafers said.

CEO Doris Hsu called it “disappointing” and said the Taiwanese company will work to “analyse the non-decision” by Berlin.

A spokeswoman for the German Ministry for the Economy and Climate said in a statement that “not all the necessary investment review steps could be completed before the end of the period.”

Siltronic said GlobalWafers will pay the German company a termination fee of 50 million euros ($56.1 million).

 

Rattled by security concerns

German politicians voiced support for the government’s decision to drop the deal, according to local business newspaper Handelsblatt.

“We do not gain technological sovereignty by selling off our silverware,” said Hannes Walter, vice chairman of the Economics Committee.

Julia Kloeckner, an economic policy spokeswoman for centre-right CDU/CSU parliamentary group, said the move was right to “keep our security interests in mind.”

Governments are increasingly scrutinising huge takeovers in the global technology industry, rattled by growing national security concerns and supply chain crunches due to the pandemic.

US regulators filed a December lawsuit to block a $40 billion merger of graphics chip star Nvidia with mobile chip tech powerhouse Arm Ltd.

The Federal Trade Commission said it was fearful it could provide one of the largest semiconductor companies with control over computing technology and designs “that rival firms rely on to develop their own competing chips.”

 

• AFP with additional editing by Jim Pollard

 

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Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years and has a family in Bangkok.

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