ASE Agrees to Merge With Siliconware Through New Holding Company

  • Siliconware investors to get NT$55 a share in cash for stake
  • Advanced Semiconductor already owns more 20% of Siliconware

Advanced Semiconductor Engineering Inc. agreed to merge with Siliconware Precision Industries Co. through a new holding company structure, ending a battle between Taiwan’s biggest semiconductor packagers over a spurned offer.

The holding company will pay NT$55 a share in cash for Siliconware stock, according a joint statement Thursday. The new entity will also issue stock to ASE investors and own 100 percent of the equity of both companies.

ASE has already acquired more than 20 percent of its rival as Siliconware twice sought white knights to scuttle the bid. Last month, a plan for Tsinghua Unigroup Ltd. to acquire a stake in Siliconware was terminated in the face of regulatory scrutiny in Taiwan while a proposal to sell stock to Foxconn Technology Group at a discount was rejected by other investors.

Under the terms of the agreement, the new holding company will exchange 0.5 of its shares for 1 common ASE share, the companies said in the statement.

ASE, the world’s largest chip packager by revenue, has been buying its rivals shares on the open market since August in an unsolicited attempt to consolidate. The Taiwanese companies both service chip industry giants such as Qualcomm Inc. and Intel Corp. but face pressures as clients explore moving advanced packaging in-house.

SPIL shares rose 1 percent to NT$50.50 in Taipei before the deal was announced. ASE gained 1.9 percent to NT$33.05. ASE has been offering NT$55 a share for SPIL stock, after increasing its bid from NT$45.

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