Fri, Jul 01, 2016 - Page 12 News List

ASE, SPIL to sign share swap deal, create a new firm

By Lisa Wang  /  Staff reporter

Advanced Semiconductor Engineering Inc (ASE, 日月光半導體) and Siliconware Precision Industries Co (SPIL, 矽品精密) yesterday said their boards have agreed to sign a joint share exchange agreement, wrapping up negations for a NT$128.7 billion (US$3.99 billion) takeover bid proposed by ASE.

The agreement is set to expire on Dec. 31 next year, at which time it would terminate unless both companies agree to extend the deadline in writing, a joint statement said.

The companies also agreed to create a new holding company, ASE Industrial Holding Co Ltd (日月光投資控股). Terms of the agreement are mostly the same as the joint share exchange memorandum of understanding signed in May.

SPIL is to sell all of its shares to the new holding company at an adjusted price of NT$51.2 per share, after excluding a NT$3.8 per share cash dividend distribution, while ASE shareholders are to be able to swap each of their ASE shares for a half share in the new holding company.

The new holding company is to own 100 percent of the equity of both ASE and SPIL, while both firms would remain separate legal entities.

If the companies plan to maintain separate operations it might not benefit them in the long term, as overlapping research and development and engineering costs would not help improve their bottom lines, CIMB Securities Ltd Taipei-based analyst Peter Chan (詹逸群) said in a note on June 17.

The ultimate success of the deal lies in how well both sides can learn to work together “to innovate strategies, steer focus and drive execution. More challenges lie ahead,” Chan said.

Based on the agreement, the two companies are to be delisted from the Taiwan Stock Exchange and the new holding company is to debut on the local bourse and on Wall Street, the statement said.

ASE is to hold almost all of the stock in the new entity, which is to issue 3.9 billion common shares.

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