Bloomberg
GlobalWafers in Talks for $4.5 Billion Siltronic Deal
(Bloomberg) — Siltronic AG, a German manufacturer of silicon wafers, said it’s in advanced talks to be acquired by Taiwan’s GlobalWafers Co. for 3.75 billion euros ($4.5 billion), adding to a record year for deals in the global semiconductor industry.Siltronic expects GlobalWafers to make an offer at 125 euros a share, a 10% premium from Friday’s close and a price that the executive board considers “attractive and appropriate.” Siltronic’s largest shareholder Wacker Chemie AG, which has a 30.8% stake, is prepared to sell at the same price, according to a statement.“The merger would create a leading player in the wafer industry,” Siltronic said in the statement, adding the deal would prohibit job losses in Germany until the end of 2024.The proposed deal, which would be GlobalWafers’ largest, would be one of the biggest transactions in the chip industry this year and suggests the companies are looking beyond the pandemic to when businesses begin to return to normal. Siltronic shares have climbed 48% this quarter, driven by expectations that clients will increase purchases of its epitaxial wafers and polished wafers.The offer will also add to a growing number of semiconductor deals this year that’s set to break the highwater mark for chip acquisitions reached in 2016, when $122 billion in transactions were struck. The largest deal of 2016 was SoftBank Group Corp.’s $32 billion purchase of Arm.Competition in the industry is heating up as companies that were once customers, such as Apple Inc., design their own chips and established players like Nvidia branch out into new areas.GlobalWafers shares gained 32% in the quarter while the Bloomberg World Semiconductor Index added 14%.Headquartered in Munich, Siltronic is a leading manufacturer of silicon wafers used in products such as smartphones, computers, navigation and digital displays. The firm, which has production sites and offices in Germany, the U.S. and other advanced manufacturing countries, had global revenues of 1.3 billion euros in 2019. The stock trades on Germany’s MDAX Index.GlobalWafers, majority-owned by Sino-American Silicon Products Inc., reported 2019 revenue of around NT$58 billion ($2 billion) and operating income of NT$18 billion.Siltronic and GlobalWafers expect to announce the deal in the second week of December, following discussion and approval by the boards of Siltronic and GlobalWafers.(Corrects Softbank’s purchase price for Arm in fifth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
