Shares of Advanced Semiconductor Engineering Inc (ASE, 日月光半導體), the world’s largest integrated-circuit packaging and testing services provider, yesterday rallied 8.44 percent after the company obtained conditional approval from China for its merger with Siliconware Precision Industries Co (SPIL, 矽品精密), dealers said.
ASE also announced at the weekend that it was planning to raise wages by between 3 and 5 percent for its employees at its headquarters in Kaohsiung.
ASE shares closed at NT$41.75 in Taipei trading yesterday, retreating from a 10 percent gain in the morning trading session.
The stock outperformed the broader market as the TAIEX closed 0.67 percent lower.
“It’s no surprise that ASE and SPIL got a boost on Monday following China’s approval [of the merger],” Hua Nan Securities Co (華南永昌證券) analyst Henry Miao (苗台生) said. “The upturn simply followed a jump in the two stocks’ American depositary receipts [ADRs] on Friday after the news of the approval broke.”
However, the two stocks’ share prices are likely to be short-lived due to technical resistance, Miao said.
On Friday, ASE’s and SPIL’s ADRs rose 12.04 percent and 5.29 percent respectively on the US market after the Chinese Ministry of Commerce issued conditional approval for the two companies to set up a holding company.
The approval came after Taiwan’s Fair Trade Commission and the US Federal Trade Commission gave their approval to the deal on Nov. 16 last year and May 15 respectively.
ASE said the merger now has all the necessary regulatory approval and the two companies have scheduled special shareholders’ meetings for February.
In May last year, the two companies announced plans to form holding company that would hold a 100 percent stake in both ASE and SPIL, but that the two firms would remain independent of each other, although their operations would be conducted under the corporate umbrella of the holding company.
The holding company is expected to be set up by May, according to ASE’s plan.
In addition to a request for ASE and SPIL to function independently under the holding company, China’s conditions for the merger included limited shareholder rights for the holding company to receive bonuses and financial data from both companies.
On Sunday, ASE announced that it planned to raise the pay for its production-line workers, technicians, engineers, administrative staff and managers in Kaohsiung effective in January based on their performance.
The firm also said it would hold a job fair in Kaohsiung on Dec. 23 to recruit about 1,000 engineers and production-line workers.
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