Wingtech Technology's acquisition of the remaining shares of Nexperia Semiconductor was unconditionally approved

On June 10, the Mergers and Acquisitions Review Committee of the China Securities Regulatory Commission held its 25th working meeting in 2020, and Wingtech Technology's acquisition of the remaining equity of Nexperia was unconditionally approved.

This time, Wingtech Technology intends to issue shares and pay cash to acquire the equity shares of the upper-level investors of the four shareholders of Hefei Yuxin, with a transaction price of 6.334 billion yuan. After the transaction is completed, Wingtech Technology will hold a total of 98.23% of the shares of Ansem Semiconductor. According to people familiar with the matter, there is another 1.77% equity ratio that is not included in this transaction because the holder is state-owned and needs to go through the bidding and auction process. 

According to the previously disclosed plan, Wingtech Technology intends to purchase the target assets held by all transaction counterparties by issuing shares and paying cash, with a transaction price of 6.334 billion yuan. The total amount of supporting funds raised by Wingtech Technology this time does not exceed 5.8 billion yuan, and it intends to pay the transaction price of 150 million yuan in cash. The listed company intends to pay the transaction price of 618,371.55 million yuan by issuing shares, and the total number of shares issued is 68,267,995 shares. It should be pointed out that from the acceptance of the CSRC on June 1, to the receipt of the acceptance notice on June 3, and the unconditional approval on June 10, it can be seen that Wingtech Technology's acquisition case has received great attention and rapid approval from the regulatory authorities.

It is reported that in this transaction, Wingtech Technology plans to raise 5.8 billion yuan in supporting funds, of which 1.6 billion yuan will be used for Ansem China's advanced packaging and testing platform and process upgrade projects, 1.05 billion yuan will be used for semiconductor communication module packaging and testing and terminal research and development and industrialization projects, 2.9 billion yuan will be used to supplement the listed company's working capital and repay the listed company's debts, and the remaining funds will be used to pay the cash consideration of this transaction and related taxes and intermediary agency fees.

Wingtech Technology's acquisition of Nexperia is the largest semiconductor acquisition in the history of the A-share market, and it is also the first time that a Chinese company has acquired a world-leading semiconductor company. After the acquisition, Wingtech Technology has become the largest semiconductor listed company in the A-share market.

After completing the acquisition of control of Ansem Group, Wingtech Technology successfully entered the semiconductor industry. Ansem Group is a world-class supplier of semiconductor standard devices, focusing on the logic, discrete devices and MOSFET markets, with more than 60 years of semiconductor professional experience. Its customers include midstream manufacturers and downstream electronic brand customers, such as Bosch, Huawei, Apple, Samsung, Asus, Dell, HP and other well-known companies. Wingtech Technology and Ansem Group are located in the upstream and downstream of the industrial chain, and have synergistic effects in many aspects such as customers, technology and products. The two parties can realize the mutual conversion of resources in the integration process, accelerate the development and implementation of Ansem Group's business in the Chinese market, and further expand its market in the consumer electronics field through the resources of listed companies.

As a high-capacity production expert in the field of basic semiconductor components, Nexperia's products are widely used in various electronic designs around the world, especially gallium nitride (GaN) technology, which is the world leader. The company's rich product portfolio includes diodes, bipolar transistors, ESD protection devices, MOSFET devices, gallium nitride field effect transistors (GaN FETs), as well as analog ICs and logic ICs. Nexperia is headquartered in Nijmegen, the Netherlands, and delivers more than 90 billion products each year that meet the stringent standards of the automotive industry. Its products are widely recognized in the industry for efficiency (such as process, size, power and performance), and have advanced small-size packaging technology that can effectively save power consumption and space.

In 2019, Nexperia's operating profit and total profit both increased year-on-year, with its performance growth significantly better than its major European and American competitors, continuing to maintain its global leading position in the industry.

Wingtech Technology is a world-leading communications and semiconductor company with more than 9,000 R&D personnel and more than 30,000 factory employees around the world. The annual shipments of mobile phones, tablets, laptops, IoT, and automotive electronic products exceed 100 million units, and the annual shipments of semiconductor chips and components exceed 90 billion. It maintains in-depth cooperation with major global brands in the fields of mobile phones, PCs, IoT, and automobiles. Its subsidiary Wingtech Communications Co., Ltd. is the world's largest mobile phone ODM company, and Nexperia is a European semiconductor company with a 60-year development history. It was formerly the Standard Products Division of Royal Philips Semiconductors of the Netherlands. It maintains a leading position in the top three in the industry in the sub-sectors of diodes, transistors, ESD protection devices, logic chips, MOSFETs, etc., and its products are widely used in mobile phones, PCs, IoT, automobiles and other fields.

Li Gang, an industry analyst at the authoritative research organization Sino, believes that as the only global leading power device IDM manufacturer controlled by Chinese capital, Ansem has broad development space for domestic substitution and is of great significance. In 2019, Ansem Semiconductor ranked first among domestic power semiconductor manufacturers in terms of revenue scale. At present, Ansem Semiconductor's domestic market share is about 10-15%, and in 2019, Ansem Semiconductor's operating income was 10.3 billion yuan (42% from Greater China). It is expected that Ansem Semiconductor's domestic market share can be increased to 30-40%, and the domestic revenue volume will increase by more than 200% (about 8 billion yuan). It is estimated that the domestic power device market size is about 6 billion US dollars. Under the wave of domestic substitution, Ansem Semiconductor has broad room for future development.

Wang Yanhui, Secretary General of the China Semiconductor Investment Alliance, believes that the huge annual shipment volume of over 100 million units has made Wingtech an important customer of major upstream semiconductor companies and an important supplier of downstream customers in various fields. Located in the middle of the industrial chain, its business covers mobile phones, tablets, laptops, IoT, automotive electronics and other segments, and it maintains close cooperation with major brand customers. With its huge shipment volume, Wingtech is highly compatible with Ansem Semiconductor, which is upstream of the industrial chain. The acquired Wingtech communication business and semiconductor business complement each other's advantages, share customers, and exchange resources, which can produce a strong synergy effect. The arrival of 5G will bring a golden development period of 5-10 years to Wingtech and Ansem.