17 December 2020
GlobalWafers to take over Siltronic
A business combination agreement (BCA) has been signed under which Taiwan-based silicon wafer manufacturer GlobalWafers Co Ltd will make a voluntary public tender offer of €125 per ordinary share to shareholders of Siltronic AG of Munich, Germany (one of the world’s largest manufacturers of hyperpure silicon wafers, with production sites in Asia, Europe and the USA) to acquire the firm.
The offer price represents a 48% premium to the 90-day volume-weighted average price of Siltronic’s shares prior to 29 November (the public disclosure of advanced discussions between the firms) and a 10% premium to the closing price of the shares on 27 November Siltronic’s last trading day prior to public disclosure).
The companies’ product portfolios complement each other in many areas and form a basis to benefit from the long-term growth drivers in the wafer industry, it is reckoned.
This includes Siltronic’s gallium nitride on silicon (GaN-on-Si) activities, which commenced as early as 2011 by joining the respective Imec Industry Affiliation Program (IIAP). A comprehensive GaN-on-Si technology platform was developed including GaN wafers for use in efficient power electronics as well as GaN-on-Si wafers for high-frequency applications (such as 5G) based on 6” and 8” wafer diameters. Siltronic also invested in research on this technology at the European Union (EU) level, joining 25 other partners in the ‘Ultimate GaN’ research project, strengthening Europe’s abilities in power products and sustainable energy management.
“The Supervisory Board welcomes the planned combination of the two companies,” says Dr Tobias Ohler, chairman of Siltronic’s Supervisory Board.
The BCA includes guarantees of protection for Siltronic’s German sites against closure and for their employees against compulsory redundancies until the end of 2024. The social partnership with German employee representatives as well as the existing collective bargaining agreements and works agreements will also be maintained. The Burghausen site will remain Siltronic’s technology and R&D center. Sufficient investment budgets will be available to maintain and further develop existing production capacities. The Siltronic brand will also remain in the combined company. “The guarantees made to the sites and the workforce were very important to us, but also maintaining the strong Siltronic brand under the GlobalWafers umbrella,” says Siltronic’s CEO Dr Christoph von Plotho.
Siltronic will continue to manage its operating business with a high degree of strategic freedom. To fully exploit the potential of the merger, Siltronic’s CEO, CFO and head of technology will assume additional management functions at GlobalWafers after completion of the proposed deal. Siltronic’s Supervisory Board will continue to be co-determined and will consist of 12 members. GlobalWafers aims to have appropriate representation on the Supervisory Board, which will continue to include three independent shareholder representatives.
Siltronic’s general dividend policy, which provides for a payout ratio of about 40% of net income, will be continued for the 2020 fiscal year. The firm plans to propose a dividend of about €2 per share, to be distributed prior to completion of the merger.
Subject to review of the offer document and their legal obligations, Siltronic’s Executive Board and Supervisory Board expect to recommend that shareholders accept GlobalWafers’ tender offer.
Wacker Chemie AG, which currently holds about 30.8% of Siltronic’s shares, has entered into a binding agreement (irrevocable undertaking) with GlobalWafers and will tender its entire Siltronic shares as part of the tender offer. The minimum acceptance threshold for the tender offer is 65%.
Closing of the transaction is subject to customary closing conditions, including the achievement of the minimum acceptance threshold and merger control and foreign investment approvals. The parties expect to complete the transaction in second-half 2021.
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