June 26, 2022

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GlobalWafers’ Siltronic Deal Fails As Germany Misses Approval Deadline

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BERLIN, Feb 1 (Reuters) – Germany could not complete a review of the planned sale of chip supplier Siltronic to Taiwan’s GlobalWafers (6488.TWO) before a deadline set by the prospective buyer expired on Monday, scuppering the 4.35 billion euro ($4.89 billion) deal, its economy ministry said.

“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,” a spokesperson for the ministry said.

On Jan. 21, China’s market regulator said it would give conditional approval for the acquisition. read more

The German ministry said if GlobalWafers made a new acquisition attempt, an investment review would be carried out again.

The chairman and chief executive officer of GlobalWafers, Doris Hsu, said the outcome was “very disappointing” and the company would “analyse the non-decision of the German government and consider its impact on our future investment strategy”.

“Europe remains an important market for GlobalWafers and it remains committed to the customers and employees in the region,” the company said in a statement, adding that it would have to pay a termination fee of 50 million euros since regulatory approvals were not obtained.

In a separate statement, Siltronic confirmed the takeover offer had expired due to the German ministry’s inaction and that the company stood to receive the termination fee.

The deal would have created the second-largest maker of 300-millimetre wafers, behind Japan’s Shin-Etsu (4063.T), as the semiconductor industry consolidates.

Germany has become wary of changes to its high-tech supply network after carmakers, one of its major sectors, were hit by a global shortage of microchips.

A recent takeover of a European semiconductor company by an Asian buyer that did go through was the purchase of Dialog Semiconductor by Japan’s Renesas Electronics Corp (6723.T).

GlobalWafers secured a majority stake in Siltronic last year and initially hoped to have the transaction wrapped up in late 2021.

Hsu told newspaper Handelsblatt last week that the company would probably invest in the United States if the deal failed.

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