ChipMOS Technologies Inc (南茂科技), a Hsinchu-based chip packaging and testing services provider, yesterday announced it plans to merge with ThaiLin Semiconductor Corp (泰林科技) in a share and cash swap totaling NT$1.44 billion (US$46.8 million).
Under the terms and conditions of the merger agreement, ThaiLin’s shareholders are to be offered a combination of NT$12.5 in cash and 0.311 of a ChipMOS share in exchange for each ThaiLin common share held.
ThaiLin, also headquartered in Hsinchu, is a chip assembly and testing services provider for memory, logic and mixed-signal chip businesses.
Based on ThaiLin’s closing share price of NT$21.2 on the GRETAI Securities Market, the deal represents a nearly 16 percent premium.
ChipMOS shares closed 1.65 percent lower at NT$38.85 on the Taiwan Stock Exchange, before the announcement of the planned merger.
ChipMOS is to be the surviving entity after the merger and is expected to remain listed on the Taiwan Stock Exchange, the company said in a stock exchange filing.
ChipMOS chairman and chief executive Cheng Shih-chieh (鄭世杰) said at a press conference yesterday that the merger will help increase the company’s business scope and better serve its customers.
In the first 10 months of the year, ChipMOS reported cumulative revenue of NT$18.15 billion, up 12.69 percent from a year earlier, while ThaiLin’s revenue totaled NT$2.23 billion, an increase of 21.84 percent year-on-year, according to company data.
The company has budgeted US$115 million for capital expenditure for this year and is expected to maintain its capital spending-to-revenue ratio at about 15 percent next year.
The deal is subject to the approval of shareholders of both ChipMOS and ThaiLin at their respective meetings to be held on Dec. 30. It also requires approval from government agencies, including the Fair Trade Commission, the Financial Supervisory Commission, the Taiwan Stock Exchange and the GRETAI Securities Market.
The two companies are subsidiaries of ChipMOS Technologies (Bermuda) Ltd. After the deal takes effect on June 17 next year, the merged entity is to become a 58 percent owned subsidiary of ChipMOS Technologies (Bermuda).
“The proposed merger of the two subsidiaries is the latest development in the company’s ongoing efforts to streamline its corporate and financial structure in order to better maximize potential efficiencies and to further build shareholder value,” the NASDAQ-listed company said in a statement.
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