Bid to buy SPIL intensifies

Advanced Semiconductor Engineering Inc. (ASE) has increased its bid to buy rival Siliconware Precision Industries Co. Ltd (SPIL) after China's Tsinghua Unigroup Ltd agreed to take a minority investment in SPIL. The semiconductor test and assembly services provider has submitted a revised proposal to acquire all shares of SPIL that it doesn't already own for about $1.68 per share, or roughly $3.9 billion in total.

SPIL recently announced that it would sell 1.03 billion new shares to a subsidiary of Tsinghua for about $1.68 per share as part of a strategic partnership. ASE said its revised offer is contingent on the termination of SPIL's deal with Tsinghua.

ASE originally announced plans to buy shares of SPIL from shareholders for about $1.36 per share in August. SPIL reacted by announcing plans to form a strategic alliance with Hon Hai Precision Industry Co. Ltd, including a share exchange, but that proposal was rejected by SPIL's shareholders.

If ASE's latest proposal is accepted by shareholders, SPIL would become a wholly-owned subsidiary of ASE, the company said.

ASE said it believes Taiwan's chip test and packaging providers must cooperate and consolidate resources in the face of intensifying global competition.

"However, from the time we launched the tender offer for shares of SPIL, we have noted the hostility of SPIL's management towards our investment and its refusal to reasonably consider the possibility of cooperating with ASE," the company stated.

Tsinghua Unigroup would control just under 25 per cent of SPIL under the terms of the deal announced last week.

"With this strategic alliance, SPIL will not only solidify relationships with our existing customers, but will also be able to provide IC packaging and testing services to Unigroup's existing and future portfolio companies in the semiconductor industry," said Bough Lin, SPIL's chair. "As Unigroup continues to build and expand its footprint in the global semiconductor value chain, it will be very beneficial to SPIL's competitive positions in both the mainland China and the global markets."

The jockeying over SPIL comes amid a record wave of consolidation in the semiconductor industry. The total value of semiconductor industry merger and acquisitions announced in 2015 now stands at more than $105 billion, according to IC Insights Inc.

Tsinghua Unigroup has been active in trying to grow through acquisition, including a $23 billion offer for U.S. memory chip giants Micron Technology Inc. in August. Last month, the company's chair told the Reuters news service that it plans to invest $47 billion over the next five years to become the world's third-largest chip vendor.

- Dylan McGrath
??EE Times