Canyon Bridge Capital Partners, the China-backed buyout fund that was barred last week by US President Donald Trump from buying a US chipmaker, said it would purchase British chip designer Imagination Technologies Group PLC.
The all-cash £550 million (US$742.3 million) deal to buy Imagination showed that Canyon Bridge remained focused on investing in Western chipmakers after its US$1.3 billion deal to buy Lattice Semiconductor Corp in the US was blocked over US natural security concerns.
Canyon Bridge on Friday said it had agreed to pay 182 pence per Imagination share, nearly a 42 percent premium to Imagination’s closing price that day.
However, the purchase is contingent on Imagination divesting US chip designer MIPS, which Imagination had bought in 2013, the two companies said in a joint London Stock Exchange filing, adding that the takeover would not result in job cuts.
Imagination said it had agreed to sell MIPS for US$65 million to Tallwood Venture Capital, an investment firm with offices in Palo Alto, California, and Wuxi, southern China.
It was not immediately clear whether the divestment would be subject to a review by the Committee on Foreign Investment in the US.
Canyon Bridge was founded with capital originating from China’s central government and had indirect links to Beijing’s space program. It manages about US$1.5 billion on behalf of Yitai Capital Ltd (奕泰資本), a Chinese state-owned company, Friday’s statement said.
Canyon Bridge’s investment focus complements China’s efforts to move its manufacturers up the value chain and create innovative and competitive global conglomerates.
In the past two years, the Chinese government has set aside at least 350 billion yuan (US$53.1 billion) to invest in new technologies.
Imagination, whose graphics power Apple Inc’s iPhone, licenses graphics and video-processing technology to semiconductor companies.
However, shares in the once-great European tech success story hit the skids in April when Apple, its biggest customer, said it would stop using its graphics technology in its new products, causing Imagination shares to crash 70 percent.
The two firms are in a legal dispute over royalties.
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