Active reorganization of companies before semiconductor acquisition of Toshiba
Park Seul Gee | seul@ | 2017-03-08 14:05:38
Active reorganization of companies is underway for Toshiba’s semiconductor sector acquisition . It is becoming more and more active effort of industries since it is difficult to bid on the sole candidate for acquisition and as Toshiba has raised the size of the disposal more than initial plan.
Foxconn Co., Ltd, an owned subsidiary of Hong Hai Group, and Taiwan``s TSMC have formed a consortium to jointly acquire Toshiba``s semiconductor business in Japan, according to foreign news sources including Taiwan Free Press on March 7. Although SK Hynix has been expected to form a consortium with Toshiba, it seems that new consortium has been formed.
The consortium between companies to acquire Toshiba``s semiconductor business was active since the price of the acquisition increased to KRW 25 trillion. Toshiba plans to sell some of its stakes in order to resolve financial difficulties, but now plans to expand it to more than 50%.
The acquisition candidates are not likely to raise funds, turning them into joint deals as acquisitions grow. SK Hynix, which was the main acquisition candidate for a while, will not be able to acquire Toshiba alone, with net cash of KRW 4 trillion, KRW 13 billion of Honghai Group of Taiwan, and KRW 14 trillion of TSMC are not enough for exclusive acquisition. In particular, there is a clear picture of the Hong Hai Group reorganization, which promotes the semiconductor business as a most desirable business. Although SK Hynix was likely to form a consortium due to its stake in SK Group, TSMC has emerged as a strong partner.
Hong Hai Group is considering a proposal to joint acquisition with TSMC instead of SK Hynix since TSMC has more financial strength and technical expertise which are necessary for Hong Hai Group.
TSMC is the world``s No. 1 semiconductor foundry (joint venture) manufacturer and is expected to generate synergies under joint acquisition of Toshiba together with Hong Hai Group. In addition, both Hong Hai Group and TSMC are Taiwanese companies and it is the industry``s main point that they will be more focused on their national companies.
As a result, SK Hynix is not expected to achieve substantial results in the Toshiba acquisition. Toshiba plans to formally decide on the spin-off of the semiconductor memory business at the temporary shareholders`` meeting next day after receiving the bidding proposal by March 29. And the next plan is to finalize the disposal at the end of March next year by selecting a target for the first round of negotiations in June, this year.
A semiconductor expert said, ‘We have to wait until the closing date of the bid as Foxcon is unlikely to have any experience in the semiconductor industry and it seems the company will enter to partnership with TMSC’.
By Park Seul Gee seul@
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Foxconn Co., Ltd, an owned subsidiary of Hong Hai Group, and Taiwan``s TSMC have formed a consortium to jointly acquire Toshiba``s semiconductor business in Japan, according to foreign news sources including Taiwan Free Press on March 7. Although SK Hynix has been expected to form a consortium with Toshiba, it seems that new consortium has been formed.
The consortium between companies to acquire Toshiba``s semiconductor business was active since the price of the acquisition increased to KRW 25 trillion. Toshiba plans to sell some of its stakes in order to resolve financial difficulties, but now plans to expand it to more than 50%.
The acquisition candidates are not likely to raise funds, turning them into joint deals as acquisitions grow. SK Hynix, which was the main acquisition candidate for a while, will not be able to acquire Toshiba alone, with net cash of KRW 4 trillion, KRW 13 billion of Honghai Group of Taiwan, and KRW 14 trillion of TSMC are not enough for exclusive acquisition. In particular, there is a clear picture of the Hong Hai Group reorganization, which promotes the semiconductor business as a most desirable business. Although SK Hynix was likely to form a consortium due to its stake in SK Group, TSMC has emerged as a strong partner.
Hong Hai Group is considering a proposal to joint acquisition with TSMC instead of SK Hynix since TSMC has more financial strength and technical expertise which are necessary for Hong Hai Group.
TSMC is the world``s No. 1 semiconductor foundry (joint venture) manufacturer and is expected to generate synergies under joint acquisition of Toshiba together with Hong Hai Group. In addition, both Hong Hai Group and TSMC are Taiwanese companies and it is the industry``s main point that they will be more focused on their national companies.
As a result, SK Hynix is not expected to achieve substantial results in the Toshiba acquisition. Toshiba plans to formally decide on the spin-off of the semiconductor memory business at the temporary shareholders`` meeting next day after receiving the bidding proposal by March 29. And the next plan is to finalize the disposal at the end of March next year by selecting a target for the first round of negotiations in June, this year.
A semiconductor expert said, ‘We have to wait until the closing date of the bid as Foxcon is unlikely to have any experience in the semiconductor industry and it seems the company will enter to partnership with TMSC’.
By Park Seul Gee seul@