Semiconductors — GlobalWafers Raises Its Offer for Siltronic to $5.35 Billion

By Avi Ben Ezra Monday, January 25, 2021

Close-up of a yellow circuit board.

GlobalWafers has increased its takeover bid for Germany-based Siltronic AG to €145 ($176) a share, representing a total offer of €4.4 billion ($5.35 billion).

‘Attractive’ Offer Submitted

GlobalWafers, a major company in the semiconductor industry, has said the latest offer is “final” as it represents a “fair value” for one of the world’s largest makers of silicon wafers, which are used for smartphones, computers, navigation, and digital displays.

If accepted, the merged company would represent the world’s second-largest silicon-wafer maker by revenue, with a market share of 32% to 35%, according to Bloomberg. Germany-based Siltronic recorded a revenue of around €1.3 billion ($1.58 billion) in 2019, while GlobalWafers reported revenue of around $2 billion for 2019.

Together, both businesses will operate 20 factories in 10 countries. The latest business offers represent likely a final stage in talks between two companies after the media reported in December that GlobalWafers agreed to buy its German rival for about €3.75 billion ($4.53 billion).

At that time, the Taiwan-based business offered to pay €125 a share ($151), a 10% premium to Siltronic’s closing price a day earlier. However, Siltronic shareholders were hesitant to accept the offer, which has forced GlobalWafers to raise theirs. Only Siltronic’s former parent company Wacker Chemie, which holds a 30.8% stake, accepted the offer.

“The combination is a great opportunity for Siltronic and GlobalWafers to jointly form a company that is a world leader in both technology and efficiency," said Dr. Christoph von Plotho, CEO Siltronic, in December’s statement.

If completed, the business deal would also represent another huge deal in the chip industry, which is arguably the world’s hottest market at the moment. In September last year, Nvidia agreed to pay $40 billion to acquire Arm from SoftBank.

"The Supervisory Board welcomes the planned combination of the two companies and thanks the Executive Board for its merits in establishing Siltronic as a technology leader in the global wafer industry," added Dr. Tobias Ohler, Chairman of Siltronic's Supervisory Board.

As seen by statements of their CEO, Siltronic’s management is in favor of this business deal. Shareholders of the German company now have until January 27 to accept the deal, which needs 65% to go through.

Summary

GlobalWafers has made a final offer in its pursuit of Siltronic by offering €145 ($176) a share, valuing the latter at €4.4 billion ($5.35 billion).

About the Author


Headshot for author Avi Ben Ezra

Avi Ben Ezra is the Chief Technology Officer (CTO) and Cofounder of SnatchBot and SnatchApp (Snatch Group Limited). He leads the Group’s long-term technology vision and is responsible for running all facets of the tech business which includes being the architect of the platforms and UI interfaces.

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