Siltronic Shares Fall Amid Doubts Over GlobalWafers Takeover
(Bloomberg) -- Siltronic AG stock fell after the company cast doubt on the planned $5.3 billion takeover by Taiwan’s GlobalWafers Co., saying the German Economy Ministry’s feedback so far was opaque and offered no clear resolution on how to win approval for the deal.
Shares in the Munich-based maker of silicon wafers lost as much as 10.8% on Monday, the most since March 16, 2020.
During recent discussions the companies didn’t receive any information as to whether and under which conditions a clearance for the takeover may be issued, the German company said late Friday in a filing following a Bloomberg News report on remedies the companies have offered.
In the ministry’s view, “in this case, a mitigation agreement is apparently not suitable to mitigate concerns with respect to the transaction,” Siltronic said in the filing. “The transaction cannot be closed” if the ministry does not issue the clearance decision by Jan. 31, it said.
GlobalWafers and Siltronic offered a range of remedies related to the deal, Bloomberg reported. Those include granting the German government special voting rights via a “golden share” as well as ways to undo the purchase or sell key assets back to the country, according to people familiar with the matter who asked not to be identified because the talks are private.
“Our focus is now in Germany. We believe we have addressed all concerns raised there constructively and comprehensively,” GlobalWafers said in a separate statement on Saturday. “This is an immensely beneficial transaction for Germany and Europe because it would secure much needed investment and know-how and a very strong and reliable partner to Europe’s semiconductor industry,” it said.
The German Economy Ministry has been looking into the deal for more than a year.
“Investment review procedures often involve very complex issues and matters that require close scrutiny,” the ministry said Friday in a statement, adding that the time frame and requirements laid out in its foreign-trade remain “valid” for the deal’s review.
Siltronic’s proposed sale to the Taiwanese technology giant poses a first test for Robert Habeck, Germany’s new economy minister. The 52-year-old co-leader of the Greens spent his first weeks in office mapping out bold plans to shift the country’s sprawling industry to renewable power.
The Siltronic deal, though, offers a delicate array of challenges mixing Germany’s interests in maintaining control of future-oriented technologies along with sensitive geopolitical considerations.
The deal is politically sensitive because of heightened tensions between China and Taiwan. In the past, Germany has tried to avoid antagonizing Chinese authorities over the island, which China’s ruling Communist Party considers part of its territory.
China also hasn’t yet granted regulatory approval for the deal -- the only other approval still pending. The country’s State Administration for Market Regulation has indicated it’s largely comfortable with remedies proposed by the companies and could make a formal decision shortly, people familiar with the matter told Bloomberg last week.
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