Authority refuses approval
Siltronic takeover failed for the time being
2/1/2022 at 8:46 am
The takeover of the German electronics company Siltronic would have been a deal worth billions in the chip manufacturing industry. But the transaction is off the table for now. The responsible Federal Ministry does not have the time for the antitrust examinations.
The Taiwanese chip supplier Globalwafers cannot take over the Munich electronics company Siltronic. The legal deadline for this ended on Tuesday night at midnight without the Federal Ministry for Economic Affairs and Climate Protection having granted the necessary approval. According to the ministry, there was not enough time for this. “By the end of this period, not all the necessary review steps could be completed as part of the investment review,” said a ministry spokeswoman. “This applies in particular to the examination of the antitrust approval by the Chinese authorities, which was only granted last week.”
The Federal Ministry of Economics had been examining the takeover for about a year. However, the Chinese competition authority only recently, on January 21, granted approval for the almost 4.4 billion euro transaction. The authority imposed conditions: According to this, Globalwafers should have sold its business around the so-called zone drawing process – a production variant for silicon wafers – within six months. In addition, the group should continue to supply Chinese customers. The Ministry would have wanted to examine these conditions more closely.
A so-called foreign trade clearance certificate in Germany would have been required for the takeover. The Federal Ministry of Economics examines whether foreign investments in domestic companies can be expected to adversely affect public order or security in the Federal Republic. So the takeover attempt has burst for the time being. The test procedure became legally irrelevant when the deadline expired, the ministry spokeswoman said. “Should the company make a new start for a new acquisition, then the investment review will of course be carried out again.”
The basis for the test procedure is the Foreign Trade Ordinance, which was tightened last year. Since then there have been new reporting requirements for investments in high and future technology sectors. These include, for example, the areas of artificial intelligence, autonomous driving, robotics, semiconductors, cyber security, aerospace and nuclear technology. According to information from ministry circles, the number of investment reviews has been increasing for years. Accordingly, there were 306 such procedures last year, after 160 in 2020, 106 in 2019 and 78 in 2018.
“No foreign buyer of key technologies”
Munich-based Siltronic is one of the leading manufacturers of silicon discs (wafers) for semiconductors and chips. The board of directors and the supervisory board had welcomed the takeover bid. The last hurdle would have been the declaration of no objection from the Federal Ministry of Economics. Siltronic employs around 4,000 people and produces in Freiberg, Saxony, among other places. The largest plant is in Singapore.
According to Globalwafers, it is the largest wafer supplier in Europe. CEO Doris Hsu recently stated that her company had offered far-reaching safeguards. “This alone clearly shows that we are not a foreign buyer of key technologies, but – like Taiwan – a strong partner for the European semiconductor industry.” If the takeover fails, Globalwafers would pursue other investment plans outside of Europe, she had announced.