GlobalWafers’ planned 4.35 billion euro ($4.89 billion) takeover of German chip supplier Siltronic collapsed late on Monday after Germany could not complete a review of the deal ahead of a end-January deadline.
The failed acquisition by Taiwan’s GlobalWafers comes at a time when a global shortage of semiconductors has laid bare Europe’s dependence on Asian suppliers, which has triggered recent efforts to boost production across the continent.
“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 Germany’s Economy Ministry said.
On Jan. 21, China’s market regulator said it would give conditional approval for the acquisition.
Shares in Siltronic were up 1.9% at 0907 GMT. Siltronic shares had been trading significantly below GlobalWafers offer price of 145 euros per share for some time after Siltronic flagged in mid-January that the deal was in limbo.
A trader said any selloff by disappointed investors could offer an entry point given that Siltronic could be worth more as a standalone business.
“Some analysts already upgraded the stock when the approval became unlikely,” the trader said.
The German Economy Ministry, which has in recent years ramped up reviews of planned takeovers of German companies by foreign firms, said an investment review would be carried out again if GlobalWafers chose to make a new acquisition attempt.
GlobalWafers said on Tuesday it would not make a new offer for the company.
‘IMPORTANT MARKET’
GlobalWafers CEO 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”.
Hsu said she would announce on Feb. 6 the company’s plans for the 4.35 billion euros which the Siltronic purchase would have cost. Hsu had said earlier the company would probably invest in America if the deal failed.
“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.
Majority shareholder Wacker Chemie, which owns a 30.83% stake in Siltronic, said it regretted the economy ministry’s decision, adding that it still intended to sell its remaining stake in Siltronic in the medium-term.
The deal would have created the second-largest maker of 300-millimetre wafers, behind Japan’s Shin-Etsu, 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 the global chip shortage.
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.
GlobalWafers secured a majority stake in Siltronic last year and initially hoped to have the transaction wrapped up in late 2021.
($1 = 0.8896 euros)
(Reporting by Andreas Rinke, Alexander Huebner, Riham Alkousaa and Ludwig Burger; Additional reporting by Christoph Steitz; Editing by Robert Birsel)
