ASE Technology Holding Co (日月光投控) yesterday said it would enter into an equity acquisition agreement with Financiere AFG SAS to fully acquire Europe’s second-largest electronics manufacturing service (EMS) provider, Asteelflash Group, indirectly for US$450 million to broaden its product offerings and global footprint.
Financiere AFG holds a 100 percent stake in Asteelflash.
The acquisition is to be made through ASE Technology’s EMS subsidiary, Universal Scientific Industrial (Shanghai) Co Ltd (環旭), the world’s biggest chip packager and tester said.
ASE Technology said it would pay 89.6 percent in cash and 10.4 percent through a share swap of new Universal Scientific shares.
“The acquisition of Asteelflash will create a synergy through its complementary geographical footprint, targeted market segments, customers, business model and technological capabilities,” ASE Technology chief financial officer Joseph Tung (董宏思) told a media briefing at the Taiwan Stock Exchange.
Given lingering global trade tensions, Universal Scientific’s acquisition of Asteelflash would provide customers with a diversity of production bases, including China, Tunisia, the Czech Republic, Germany, France, the UK and Mexico, as well as Silicon Valley, California, ASE Technology said in a statement.
The deal — which is subject to approval by competition watchdogs in China, Europe and the US — is to occur in the third quarter of next year at the earliest, ASE Technology said.
“Asteelflash is dedicated to supplying customers with small volumes of products in the early stages of development, given the company’s flexibility in manufacturing. With its help, Universal Scientific can tap into those markets,” Tung told reporters.
“The products are mostly consumer electronics, and some 5G and AI [artificial intelligence] applications,” he said.
Asteelflash can leverage Universal Scientific’s global scale of operations and manufacturing, as well as its branding and service capabilities to take advantage of opportunities to handle larger orders from major clients, Tung added.
EMS companies need to establish flexible manufacturing capacity around the global to cope with increasing industrial fragmentation and diversification, Universal Scientific chairman Jeffrey Chen (陳昌益) said.
Acceleration in the development of devices that use 5G, the Internet of Things (IoT), AI and edge computing makes it essential for EMS companies to become even more agile, Chen said.
After the transaction, Asteelflash, which is currently privately owned, would become an important subsidiary of Universal Scientific, with its existing operations and management team left unchanged, the ASE Technology statement said.
Asteelflash focuses on segments such as automotive, energy management, IoT, industrial and data processing.
Last year, the firm reported revenue of US$1 billion and net profit of US$70 million to US$80 million.
Asteelflash said it serves more than 200 clients, operates 17 production bases in eight countries and employs about 6,000 employees.
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