And that could really be the big selling point in this deal for ATIC. We have long known the largest hurdle GlobalFoundries will face is getting new customers OTHER than AMD on board. With a successful purchase of Chartered Semi, ATIC would likely hurry along a merger of the two entities and thus create instant customer base for the GlobalFoundries group. Chartered would also provide ATIC with a total of six additional fab facilities including one 300mm production. What Chatered gains in the deal is access to more advanced technologies than it would have otherwise been able to offer as GlobalFoundries has been making the push to 28nm production very quickly.
This is of course still just a “bid” to buy the company but people I spoke with don’t seem to think there are going to be any hurdles in the way of its completion. It should be an easy match for the three companies involved (ATIC, Chartered and GF) and help propel the unit to profit sooner than would otherwise have been possible.
SINGAPORE–(BUSINESS WIRE)–Advanced Technology Investment Company LLC (ATIC) of Abu Dhabi and Chartered Semiconductor Manufacturing (Chartered) of Singapore today announced a definitive agreement whereby ATIC would acquire Chartered, one of the world’s top dedicated semiconductor foundries.
The proposed acquisition will be effected by way of a scheme of arrangement under section 210 of the Companies Act of Singapore, subject to the approval of Chartered shareholders and the sanction of the High Court of Singapore. The transaction is expected to close during the fourth quarter of 2009. Completion of the transaction will be subject to customary conditions, such as regulatory and shareholder approvals. Details can be found in the joint scheme announcement that has been filed with the Singapore Exchange Securities Trading Limited (SGX), as well as in the scheme document to be sent to Chartered shareholders.
Under this scheme of arrangement, each Chartered ordinary share will be acquired by ATIC for a cash consideration of S$2.68 per share. The transaction represents an equity value of approximately S$2.5 billion (US$1.8 billion) and a total value of approximately S$5.6 billion (US$3.9 billion), including debt and convertible redeemable preference shares of approximately S$3.1 billion (US$2.2 billion) as of June 30, 2009. The price represents a premium of 14.2 percent to its 30 trading-day volume weighted average price, 26.8 percent to its 90 trading-day volume weighted average price and 44.2 percent to its 6-month volume weighted average price on the SGX. The estimated amount of consideration for each American Depositary Share (“ADSs”) is US$18.641. The actual amount per ADS that ADS holders will receive will depend on the applicable prevailing exchange rate, less the amount of applicable ADS depositary’s fees, taxes and expenses.
ATIC is a technology investment company wholly owned by the government of Abu Dhabi. This acquisition is its second major investment in the semiconductor industry and follows the company’s March 2009 creation of GLOBALFOUNDRIES, a U.S.-headquartered, leading-edge semiconductor manufacturing company and a joint venture with AMD. The acquisition of Chartered will be made through ATIC International Investment Company LLC, a subsidiary of ATIC. Once the transaction is completed, ATIC will be the sole owner of Chartered.
The transaction will allow ATIC to build on the complementary platforms of Chartered and GLOBALFOUNDRIES, with Chartered’s customer relationships and capabilities in both 8-inch and 12-inch fabrication, and GLOBALFOUNDRIES’ advanced technology expertise, capacity profile and global footprint.
“We believe that by having access to ATIC’s long-term capital and related assets, Chartered has an opportunity to bring its skills, capabilities and leadership to the next level,” said Waleed Al Mokarrab, Chairman of ATIC. “By acquiring Chartered, ATIC is expanding its investments in the semiconductor industry which currently consist of a GLOBALFOUNDRIES leading facility in Dresden, Germany and a new, state-of-the-art facility under construction in upstate New York.”
Pending appropriate board approvals, Doug Grose, chief executive officer of GLOBALFOUNDRIES, would serve as CEO of the combined operations, with Chia Song Hwee, CEO of Chartered, serving as chief operating officer. Chia will also spearhead the integration effort.
“Chartered’s board of directors recognizes the efforts of the management team and employees on the considerable progress they have made,” said Jim Norling, chairman of the board of directors at Chartered. “Given the importance of scale and the need for substantial, continued capital investment, and having carefully assessed all strategic options available to Chartered, we believe this transaction provides Chartered shareholders the opportunity to realize their investment. In addition, it enables Chartered to accelerate its goal of becoming a leading player in the semiconductor industry. We have today appointed Deutsche Bank AG, Singapore Branch as an independent financial advisor to advise shareholders on the fairness of the offer, and we will submit the proposal for a shareholder vote.”