Advanced Semiconductor Engineering Inc (ASE, 日月光半導體) yesterday said that it would seek to extend the deadline of a takeover bid for its rival Siliconware Precision Industries Co Ltd (SPIL, 矽品精密), if China did not grant it permission to proceed with the deal by end of the year.
The deal, worth NT$128.7 billion (US$4.24 billion), has received approval from the regulatory agencies of various nations, including Taiwan, the US and South Korea, as well as Europe, the chip tester and packager said.
However, the transaction is yet to complete, as the Chinese Ministry of Commerce earlier this month said that it needs time for further scrutiny.
To achieve final approval, ASE needs to start the whole procedure again by resubmitting an application to the Chinese authority.
The Chinese Ministry of Commerce has a mandatory review period of 30 to 180 days.
“We still hope to see a positive result before the Dec. 31 deadline, based on an agreement signed by ASE’s and SPIL’s boards of directors,” ASE chief operating officer Tien Wu (吳田玉) told reporters on the sidelines of the company’s annual shareholders’ meeting in Kaohsiung.
“The companies might seek to complete the all of the requirements by extending [the deadline] if it is not approved,” Wu said.
ASE and SPIL on June 30 last year inked a joint share-exchange agreement to facilitate the merger.
Under the terms of the agreement, ASE is to form ASE Industrial Holding Co (日月光投資控股) by the end of this year, after it secures approval for the merger from competition watchdogs in major markets.
The new entity is to fully own ASE and SPIL, with the two firms remaining separate legal entities.
Meanwhile, ASE yesterday said it is confident revenue would grow in the second half, as communications from clients indicate solid demand.
“The company is well on track to post quarterly growth in the second half,” Wu said.
Market demand largely matches what the company forecast earlier this year, he said.
For the whole of this year, ASE is expected to outperform the worldwide logic IC industry, whose revenue is predicted to grow by 4 percent annually, Wu said.
ASE last year posted revenue of NT$274.9 billion, representing a 3 percent contraction from 2015’s NT$283.3 billion.
Asked whether ASE would consider investing in new factories in the US, Wu said that would not happen in the next two to three years because of a combination of factors, including labor costs, tax rules, logistics and other issues.
“No major ASE investment in the US is on the horizon,” he said.
ASE shareholders yesterday approved a cash distribution of NT$1.4 per share based on the company’s net profit of NT$21.68 billion last year, or earnings per share of NT$2.83.
The distribution represents a 3.66 percent yield based on the stock’s closing price of NT$38.3 yesterday.
SPIL shareholders yesterday also approved a plan to distribute a cash dividend of NT$1.75 per share, based on last year’s net profits of NT$9.83 billion, or earnings per share of NT$3.19.
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