Shares of MediaTek Inc (聯發科) and MStar Semiconductor Inc (晨星半導體), two leading integrated circuit designers, plunged yesterday following reports that a possible merger has been postponed until 2016.
MediaTek, the nation’s biggest handset chip designer, and Mstar, the world’s largest supplier of chips for flat-screen TVs, saw their shares fall soon after the Taiwan Stock Exchange opened over concerns about the planned merger, which has been postponed twice since January as it awaits approval from foreign governments.
The Chinese-language Economic Daily News said in a report yesterday that the two companies might delay the actual merger date until 2016 in order to win approval from Chinese antitrust authorities.
The report did not say where the daily obtained the information.
MediaTek shares closed down 2.53 percent at NT$366.5, while MStar shares fell 6.48 percent to NT$245.5, both underperforming the benchmark TAIEX, which edged down 0.54 percent.
MediaTek said in a filing to the Taiwan Stock Exchange that the report was purely media speculation.
The company in June last year announced that it planned to acquire MStar in a deal estimated to be worth NT$115 billion (US$3.9 billion), but the two companies in December last year decided to push back the effective date for the merger from the original Jan. 1 to May 1. Then in March they proposed changing the effective date of the merger to Aug. 1.
Carlos Peng (彭國維), an analyst at Fubon Securities Investment Services Co (富邦投顧), said yesterday he is still optimistic about the deal and believes Chinese regulators will give it the green light “in the not too distant future.”
MediaTek hopes the merger will broaden its product portfolio to compete with rivals such as US-based Qualcomm Inc and China’s Spreadtrum Communications (展訊通信).
“The development [merger] will strengthen MediaTek’s competitiveness in both the communications and TV graphics segments,” Peng said in a note.