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Semiconductor Manufacturing International Corporation (SMIC), China’s largest wafer foundry, has cleared the final regulatory hurdle for a share-based acquisition of the remaining 49 per cent stake in its Beijing-based foundry unit, paving the way for what could become the largest merger and restructuring deal on Shanghai’s Star Market.
China’s securities regulator approved SMIC’s plan to issue 547.2 million A-shares to five shareholders of Semiconductor Manufacturing North China (Beijing) Corporation, or SMNC, according to an exchange filing published late on Thursday. The approval, valid for 12 months, allows China’s biggest contract chipmaker to proceed with the share issuance and related asset purchase procedures.
Here are the key details of the merger and restructuring:
- The Deal: SMIC is issuing 547.2 million new A-shares to five state-linked stakeholders to buy out the remaining 49% of SMNC.
- The Sellers: The major stakeholder is the China Integrated Circuit Industry Investment Fund (known as the “Big Fund“).
- Company Status: SMNC (founded in 2013) will become a wholly owned subsidiary of SMIC.
- Financial Impact: SMIC expects this acquisition to boost its earnings per share and improve its asset quality.
- Strategic Goals: The move aligns with China’s broader national goals to boost domestic self-reliance, control local manufacturing operations, and meet high demands for 12-inch wafers amid strict trade rules. [1, 2, 3, 4]
For more detailed reporting on the deal and its broader impact on the industry, you can read the full article on the South China Morning Post or explore related market analysis on Stock Analysis. [1, 2]
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