Thu, Feb 01, 2007 - Page 11 News List

Private trade association calls for fast ASE review

HURDLES The review of a US-led buyout offer for the chip maker could be delayed after the potential buyer said that it would consider making the company private

By Kevin Chen  /  STAFF REPORTER

A private US trade association yesterday called on Taiwan's government to complete its review of the proposed buyout by a consortium led by the Carlyle Group for Advanced Semiconductor Engi-neering Inc (ASE, 日月光半導體) as soon as possible.

The US-Taiwan Business Council also said in its Semiconductor Report -- Annual Review 2006 that the potential deal highlights the ability of Taiwanese companies to attract substantial foreign investments.

Apart from greatly benefiting the nation's economy, the planned buyout also underscores the attractiveness of Taiwan's semiconductor market, the Washington-based group said in a statement released on Tuesday.

Carlyle first expressed an interest in purchasing Kaohsiung's ASE on Nov. 24 for approximately US$5.47 billion (NT$180.23 billion).

ASE is the world's biggest chip packager and tester.

On Jan. 10, the US private equity fund applied to the government's Investment Commission for the purchase, targeting the acquisition of all of ASE's 4.6 million outstanding shares at NT$39 per share.

"Carlyle's entry into Taiwan's semiconductor market reflects the high caliber of Taiwan businesses and a desire to link the US and Taiwan -- arguably the two most important semiconductor markets in the world," the council's president Rupert Hammond-Chambers said in the statement.

According to the council's forecast, the nation's semiconductor market is expected to become the world's largest in terms of expenditures on chip equipment and for dynamic random access memory (DRAM) production this year, thanks mainly to new partnerships and a number of new investments.

The review of Carlyle's buyout offer for ASE could be held up after the consortium said it would consider taking the company private after the deal is closed.

The talk of going private has caused government concerns that the nation's other high-tech firms could follow suit.

But industry watchers have praised the proposed deal because ASE may stand to gain orders from Carlyle's other semiconductor businesses.

The US fund already includes Jazz Semiconductor Inc, Toshiba Ceramics Co and Freescale Semiconductor Inc in its portfolio.

Hammond-Chambers said in the statement that it is important to move away from the notion that only semiconductor companies can realize synergies through mergers and acquisitions in the semiconductor sector.

"Private equity firms are also well positioned to add value for shareholders, market sectors and economies," he wrote.

Emile Chang (張銘斌), a spokesman for the Investment Commission, told the Taipei Times on Jan. 12 that the government had not established a timetable for reviewing the Carlyle-ASE deal.

He also declined to comment on whether ASE would stop trading its shares on the Taiwan Stock Exchange following the buyout.

Nevertheless, Chang said that Carlyle was preparing to set up a local subsidiary and would use the unit to acquire ASE.

Shares of ASE dropped 0.4 percent to NT$37.55 on the Taiwan Stock Exchange yesterday.

additional reporting by Lisa Wang

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