Abu Dhabi’s Advanced Technology Investment Company has agreed to buy Singapore-based Chartered Semiconductor Manufacturing (Chartered) for S$2.5 billion ($1.8 billion) in cash.
This acquisition is its second major investment by ATIC in the semiconductor industry following its March 2009 creation of Globalfoundries, a joint venture with Advanced Micro Devices.
ATIC said that it will offer S$2.68 per each Chartered share. The transaction represents a total value of about S$5.6 billion ($3.9 billion), including debt and convertible redeemable preference shares of about S$3.1 billion ($2.2 billion) as of June 30, 2009. The price represents a premium of 14.2% to its 30 trading-day volume weighted average price.
Waleed Al Mokarrab, chairman of ATIC, said: “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. ATIC is expanding its investments in the semiconductor industry which currently consist of a Globalfoundaries facility in Dresden, Germany and a new under construction in New York.”
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 Globalfoundaries’ technology, capacity profile and global footprint, the companies said.
The companies said that Temasek Holdings, which currently owns approximately 62% of Chartered’s shares, supports the acquisition and has signed an irrevocable undertaking to vote in support of the transaction.
Doug Grose, chief executive officer of Globalfoundries, would serve as CEO of the combined operations, and Chia Song Hwee, CEO of Chartered, would serve as chief operating officer once the deal is completed.
Morgan Stanley Asia (Singapore) and Citigroup Global Markets Singapore serve as joint financial advisors to Chartered.
Ibrahim Ajami, CEO of ATIC, said: “Chartered and Globalfoundries will be able to draw on each other’s strengths to enable the next generation of semiconductor innovation, utilising the value of both companies and the intellectual capital of thousands of skilled employees. Chartered and Globalfoundries are well positioned to meet the growing chip demand to come from billions of new mobile phones, cars, televisions, computers and other devices.”
The transaction, which is subject to regulatory and shareholders’ approval, is expected to close during the fourth quarter of 2009.
