ASE purchase 5% of rival SPIL

Mergers and acquisitions happen very frequently in the semiconductor industry. However, what it is not common that these kind of operations proceed smoothly, quickly and without hurdles. This is the case of the public takeover of Siliconware Precision Industries (SPIL) for Advanced Semiconductor Engineering Inc (ASE). Indeed, the company dealing with the agreement (KGI) just confirmed a very small progress on the negotiation (less than 5%).

The reason behind the delayed progression of the process is to be found in SPIL’s negative attitude towards the acquisition.  As a matter of fact, SPIL ’s chairman, Lin Wenbo, recently released an open letter to its shareholders where he was highlighting a possible underestimate of the agreed selling price, together with a series of not favorable positions of the company towards the market if the acquisition would get to a positive conclusion. According to Wendbo, in fact, this last situation would particularly make the company lose important opportunities for the future; hence, his urge for the shareholders to review the acquisition deal.

In addition to what already said, Wenbo, rightfully pointed out that, despite ASE statements of investing in SPIL only due to financial reasons, they also contemporary mentioned that this acquisition would be helpful to face the increasing competition on the market. In conclusion, what ASE affirms appear quite contradictory for a company interested only in financial investments. As Wenbo said: “The two statements were completely contradictory, showed that ASE is deliberately to take over SPIL.”