Jiangsu Changjiang Electronics Technology, China’s biggest chip tester, has made an offer to buy Temasek’s 83 per cent stake in Singapore-based Stats ChipPac for $780m in cash in the largest ever move by a Chinese semiconductor group overseas.
Stats ChipPac, the world’s fourth-largest provider of chip packaging and testing, said it had entered into an exclusive, 30-day negotiation period with Singapore’s state investment company, which has held shares in Stats ChipPac since 1995.
JCET was founded in 1972 and is listed on the Shanghai Stock Exchange. It has five manufacturing plants in Jiangsu and Anhui provinces and recorded revenue in its 2013 fiscal year of $830m.
Stats ChipPac has manufacturing facilities in South Korea, Singapore, China and Taiwan, where the company has a 52-owned subsidiary that is not included in the deal.
In the three years to 2013 Stats ChipPac rode a wave of growth in mobile communications – its largest business segment – but was the hit by what the company calls a “bifurcation” of the smartphone market that year.
That sent the company into a net loss of over $5m in the latest quarter ended September, from net income of $13m in third quarter of 2013.
The purchase of Stats ChipPac would add to the $26bn of semiconductor deals in the past year, according to Bloomberg data. It gives the company an enterprise value of $1.8bn.
Tianshui Huatian Technology, another Chinese chip tester, pulled out of talks in August to acquire Stats ChipPac, which is being advised by Citibank on the deal with JCET.
Shares of Stats ChipPac have risen 73 per cent since mid-May, two days before the company first said it received an approach from an unnamed bidder, according to Bloomberg. They are still down more than 90 per cent from their March 2000 peak.
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