Chinese Private Equity Firm Wise Road Capital and Magnachip call off $1.4bn Deal

Dec 14, 2021 | News

Chinese private equity firm Wise Road Capital and U.S. chipmaker Magnachip Semiconductor Corp have terminated their $1.4 bn merger agreement struck in March, the companies said in a joint statement on Monday.

The U.S. Treasury Department had said in August the deal posed “risks to national security”, while the Committee on Foreign Investment in the United States (CFIUS) had ordered the deal to be put on hold in June.

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“This course of action resulted from the inability of the parties, despite months of effort, to obtain CFIUS’s approval for the merger,” Wise Road and Magnachip said on Monday.

Magnachip will get a termination fee of $70.2 million, according to the statement. Its shares were down 1.8% at $16.81 in extended trading.

The semiconductor firm also said it had adopted a limited-duration shareholder rights plan “to allow adequate time to evaluate all options”.

Magnachip is a designer and manufacturer of analog and mixed-signal semiconductor platform solutions for communications, IoT, consumer, industrial and automotive applications. The Company provides a broad range of standard products to customers worldwide. Magnachip, with more than 40 years of operating history, owns a portfolio of approximately 1,200 registered patents and pending applications, and has extensive engineering, design and manufacturing process expertise. 

Wise Road Capital is a global private equity firm that invests in leading technology companies. The firm focuses on identifying opportunities in enabling technologies for global urbanization and smart & green life through close cooperation with companies across several main themes, including smart city, intelligent manufacturing and renewable energies. Wise Road Capital strives to build a healthy international ecosystem around these key themes through its investments and its international management team that has a combination of industry and investment expertise.

Source: Reuters

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