Advanced Semiconductor Engineering Inc (ASE, 日月光半導體) yesterday cleared the final regulatory hurdle to merge with rival Siliconware Precision Industries Co Ltd (SPIL, 矽品精密) in a deal worth about NT$128 billion (US$4.27 billion) after receiving conditional approval from Chinese regulators.
China’s permission paves the way for ASE to take the merger deal to the next stage, although about five months behind its original plan.
“As ASE and SPIL have now received all necessary anti-trust clearances for the transaction, ASE will immediately proceed with the establishment of a holding company,” the companies said in a joint statement.
Photo: Chu Pei-hsiung, Taipei Times
The Kaohsiung-based chip testing and packaging services provider plans to create the holding company by the end of May next year after ASE and SPIL shareholders vote on the merger at extraordinary meetings scheduled for February, the statement said.
The holding company, ASE Industrial Holding Co (日月光投資控股), would fully own ASE and SPIL, which are to remain separate legal entities, it said.
The holding company would be listed in Taiwan and the US, and ASE and SPIL would continue to expand their investments in Taiwan, it added.
“ASE and SPIL are aware that certain authorities and industry players in China might have concerns over the potential restrictive effects of the [deal],” the companies said. “In order to mitigate such concerns, ASE and SPIL filed a remedial proposal with the [Chinese] Ministry of Commerce’s Anti-Monopoly Bureau that included the companies’ commitments to maintain independent operations for a limited period.”
According to information posted on the ministry’s Web site, over the next 24 months ASE and SPIL are to operate independently, meaning they would not be allowed to share sensitive information such as pricing, sales strategies, input capacity and raw material sourcing.
“The anti-monopoly investigation shows that ASE and SPIL have overlapping businesses horizontally, as both are leading companies in the world’s semiconductor packaging and testing industry,” the ministry said in a statement.
The ministry said it is concerned that the merger would further lift ASE’s market share, which would give it greater power to adjust pricing strategies that might hinder market competition and exclude potential newcomers.
That could ultimately damage the interests of its clients and consumers, it added.
After the transaction, ASE, the world’s biggest chip tester and packager, would see its market share climb to between 25 percent and 30 percent share, the ministry said.
Separately, SPIL said last night that it has agreed to sell a 30 percent stake in its subsidiary located in Suzhou to China's Tsinghua Unigroup Ltd (清華紫光) for 1.026 billion yuan (US$155 million).
SPIL said the transaction is expected to help the company tap the fast growing Chinese market, while the proceeds will be used to expand its production capacity in Taiwan.
Additional reporting by CNA
This story has been updated since it was first published.
NO-LIMITS PARTNERSHIP: ‘The bottom line’ is that if the US were to have a conflict with China or Russia it would likely open up a second front with the other, a US senator said Beijing and Moscow could cooperate in a conflict over Taiwan, the top US intelligence chief told the US Senate this week. “We see China and Russia, for the first time, exercising together in relation to Taiwan and recognizing that this is a place where China definitely wants Russia to be working with them, and we see no reason why they wouldn’t,” US Director of National Intelligence Avril Haines told a US Senate Committee on Armed Services hearing on Thursday. US Senator Mike Rounds asked Haines about such a potential scenario. He also asked US Defense Intelligence Agency Director Lieutenant General Jeffrey Kruse
INSPIRING: Taiwan has been a model in the Asia-Pacific region with its democratic transition, free and fair elections and open society, the vice president-elect said Taiwan can play a leadership role in the Asia-Pacific region, vice president-elect Hsiao Bi-khim (蕭美琴) told a forum in Taipei yesterday, highlighting the nation’s resilience in the face of geopolitical challenges. “Not only can Taiwan help, but Taiwan can lead ... not only can Taiwan play a leadership role, but Taiwan’s leadership is important to the world,” Hsiao told the annual forum hosted by the Center for Asia-Pacific Resilience and Innovation think tank. Hsiao thanked Taiwan’s international friends for their long-term support, citing the example of US President Joe Biden last month signing into law a bill to provide aid to Taiwan,
China’s intrusive and territorial claims in the Indo-Pacific region are “illegal, coercive, aggressive and deceptive,” new US Indo-Pacific Commander Admiral Samuel Paparo said on Friday, adding that he would continue working with allies and partners to keep the area free and open. Paparo made the remarks at a change-of-command ceremony at Joint Base Pearl Harbor-Hickam in Hawaii, where he took over the command from Admiral John Aquilino. “Our world faces a complex problem set in the troubling actions of the People’s Republic of China [PRC] and its rapid buildup of forces. We must be ready to answer the PRC’s increasingly intrusive and
STATE OF THE NATION: The legislature should invite the president to deliver an address every year, the TPP said, adding that Lai should also have to answer legislators’ questions The Chinese Nationalist Party (KMT) yesterday proposed inviting president-elect William Lai (賴清德) to make a historic first state of the nation address at the legislature following his inauguration on May 20. Lai is expected to face many domestic and international challenges, and should clarify his intended policies with the public’s representatives, KMT caucus secretary-general Hung Meng-kai (洪孟楷) said when making the proposal at a meeting of the legislature’s Procedure Committee. The committee voted to add the item to the agenda for Friday, along with another similar proposal put forward by the Taiwan People’s Party (TPP). The invitation is in line with Article 15-2