TORONTO, ON / ACCESSWIRE / December 1, 2020 / Finance executives at Toronto-based Hamilton Chukyo Brokerage have today said that Taiwan's GlobalWafers Co. has revealed it is in advanced takeover talks with German chipmaker Siltronic AG, in a 3.75 billion Euros ($4.5 billion) deal to create a leading player in the wafer industry.
"After a record year for deals in the global semiconductor industry, GlobalWafers is planning to make an offer at 125 euros a share, a 10% premium to Siltronic's closing share price on Friday," said Michael Williams, Head of Private Wealth Management at Hamilton Chukyo Brokerage.
Silitronic stated its executive board finds the offer to be "attractive and appropriate," adding that its largest shareholder, Wacker Chemie AG, which holds a 30.8 percent interest, is willing to sell at the same price.
"The combined would create a leading player in the wafer industry," Siltronic said in the statement, adding that the deal would prevent job losses in Germany until the end of 2024.
In early trading on Monday, Siltronic shares climbed as much as 12 percent, their highest intraday gain since March. In Taiwan, GlobalWafers shares were up 9.8 percent. It said that the deal is subject to regulatory requirements and does not offer any guarantee that a final transaction will take effect.
"The deal may fall through due to anti-trust review, however, if a merger is approved, this will be highly beneficial to GlobalWafers' current shareholders," said Anthony Roberts, Head of Institutional Trading at Hamilton Chukyo Brokerage.
"The merged company will become the world's largest silicon wafer manufacturer by revenue, with a market share of 32% to 35%," he added.
The proposed deal will be biggest ever for GlobalWafers, and one of the largest this year for the chip industry, indicating that businesses are looking ahead of the pandemic to a return to regular business. Siltronic shares increased by 48 percent this quarter, powered by the anticipation that sales of its epitaxial wafers and polished wafers will increase.
Nomura is advising GlobalWafers on the transaction, whilst Credit Suisse is advising Siltronic. Both companies plan to announce the deal in the second week of December, following discussion and approval by the boards of both firms.
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Hamilton Chukyo Brokerage provides financial advice and asset management services to private, institutional and corporate clients worldwide.
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SOURCE: Hamilton Chukyo Brokerage
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