No sooner had the government dubbed the proposed buyout of Advanced Semiconductor Engineering Inc (ASE) by Carlyle Group "a sign of faith in the nation's investment climate" and the press lauded the deal as "the largest ever involving a Taiwanese company," than its repercussions in business circles and at the national level were beginning to be felt.
In the 1993 movie Jurassic Park, the chaos scientist Ian Malcolm, played by Jeff Goldblum, argued that "life will find a way" to reproduce, even if the beings concerned -- dinosaurs in the film -- are all females.
The film reminded many in the industry just what happened last Friday when ASE, the world's largest semiconductor packaging and testing company, confirmed it had received an indication of interest from a private equity consortium led by the Carlyle Group, paving the way for the Taiwanese firm to openly invest in China.
The reason why the analogy is a pertinent one is that if ASE agrees to the all-cash buyout by the Carlyle-led consortium -- and provided the government does not oppose it -- ASE will be transformed into a foreign company. At that point, Carlyle will likely apply to delist ASE from the Taiwan Stock Exchange, as long as it secures 75 percent of the outstanding common shares of the local firm. This will in turn allow ASE to circumvent the government's China-bound investment restrictions, especially the present 40 percent investment ceiling of a listed company's net value.
As the buyout has yet to be concluded, the reason why ASE chairman and chief executive officer Jason Chang (
One thing that is certain is that both US-based Amkor Technology and Singapore's STATS ChipPAC -- ranked second and third in the sector, respectively -- have been stepping up their investments in China to undercut ASE's competitiveness while the firm is still waiting for the government to commit itself to action.
If the NT$179.27 billion (US$5.46 billion) buyout of ASE materializes, it will embarrass a government that has worked so hard to encourage local manufacturers to "keep their roots" in Taiwan. It would also pour cold water on a government which had hoped to attract 70 companies to list themselves on the local stock markets next year and 250 companies within the next three years.
It would also mean the loss of another blue-chip company from the local bourse, after Green Point Enterprises Co, a mobile phone casing maker, agreed last week to a buyout deal by US electronics component maker Jabil Circuit and will delist next year.
In the past, buyouts of local firms were usually an isolated phenomenon. Nowadays, the appetite of foreign investors is higher and businesses are more keen on delisting. Several investment banks, including Goldman Sachs, have predicted more foreign investors will follow suit in shopping for other potential acquisition targets in Taiwan, especially those which are undervalued, such as United Microelectronics Corp, MediaTek, Quanta Computer and Lite-On Technology Corp.
Coupled with recent cases of companies that have announced capital reduction plans, the government should be wary of companies that may attempt to delist their stock in order to circumvent China-bound investment regulations. Life will find a way and so do companies. The publicized cases are just the tip of the iceberg.
There is much evidence that the Chinese Communist Party (CCP) is sending soldiers from the People’s Liberation Army (PLA) to support Russia’s invasion of Ukraine — and is learning lessons for a future war against Taiwan. Until now, the CCP has claimed that they have not sent PLA personnel to support Russian aggression. On 18 April, Ukrainian President Volodymyr Zelinskiy announced that the CCP is supplying war supplies such as gunpowder, artillery, and weapons subcomponents to Russia. When Zelinskiy announced on 9 April that the Ukrainian Army had captured two Chinese nationals fighting with Russians on the front line with details
On a quiet lane in Taipei’s central Daan District (大安), an otherwise unremarkable high-rise is marked by a police guard and a tawdry A4 printout from the Ministry of Foreign Affairs indicating an “embassy area.” Keen observers would see the emblem of the Holy See, one of Taiwan’s 12 so-called “diplomatic allies.” Unlike Taipei’s other embassies and quasi-consulates, no national flag flies there, nor is there a plaque indicating what country’s embassy this is. Visitors hoping to sign a condolence book for the late Pope Francis would instead have to visit the Italian Trade Office, adjacent to Taipei 101. The death of
The Chinese Nationalist Party (KMT), joined by the Taiwan People’s Party (TPP), held a protest on Saturday on Ketagalan Boulevard in Taipei. They were essentially standing for the Chinese Communist Party (CCP), which is anxious about the mass recall campaign against KMT legislators. President William Lai (賴清德) said that if the opposition parties truly wanted to fight dictatorship, they should do so in Tiananmen Square — and at the very least, refrain from groveling to Chinese officials during their visits to China, alluding to meetings between KMT members and Chinese authorities. Now that China has been defined as a foreign hostile force,
On April 19, former president Chen Shui-bian (陳水扁) gave a public speech, his first in about 17 years. During the address at the Ketagalan Institute in Taipei, Chen’s words were vague and his tone was sour. He said that democracy should not be used as an echo chamber for a single politician, that people must be tolerant of other views, that the president should not act as a dictator and that the judiciary should not get involved in politics. He then went on to say that others with different opinions should not be criticized as “XX fellow travelers,” in reference to
RSS