Powertech seeks 30-51% of Greatek

December 19, 2011 — Powertech Technology Inc. (trading number:6239) has approved a tender offer of NT$25.28 per share for the common shares of Greatek Electronic Inc. (trading number:2441), with a minimum acquisition target of 166,061,377 shares, or 30% of the outstanding shares for Greatek. The maximum acquisition is set at 282,304,340 (51%).

Powertech can expect to spend up to NT$7.137 billion in the tender offer. The tender offer period runs through February 3, 2012 and must be approved by relevant competent authorities.

Greatek specializes in semiconductor packaging and test services, covering P-DIP, SOP, SOJ, SSOP, TSSOP, MSOP, QFP, LQFP, TQFP, PLCC, TO and QFN form factors. It boasts circuit probing and final test offerings, and owns 2 factories at Zhunan in Miaoli County, Taiwan (R.O.C.). Greatek employs 2500 people.

The deal would boost PTI’s logic-chip packaging portfolio. DRAM packaging is Powertech’s main business, Ken Liu of Taiwan-based China Economic News Service (CENS), notes, and the DRAM industry has suffered declines in recent quarters. Liu quotes PTI general manger Zhongji Liao as saying that the company will shift its logic packaging business to Greatek, which will operate as a independent manufacturer.

With the tender offer, Powertech plans to create a system of cross support of production between Powertech and Greatek, increasing market competitiveness and technological efficiency for various products and reducing costs for a total packaging process. The new alliance also is expected to increase consolidated revenue. Positive changes on enterprise value and return on equity of both companies is foreseeable, reports management.

Also read: Elpida, PTI, UMC finalize 3D IC partnership

Grand Cathay Securities is commissioned to serve as the financial adviser and PWC Legal is commissioned to serve as the legal consultant of offeror in the tender offer.

Powertech provides IC packaging, testing, and distribution. Powertech has more than 6,000 employees worldwide, with facilities at Hsinchu Industrial Park, Hsinchu Science-Based Park and Suzhou Industrial Park. Please refer to http://www.pti.com.tw for more information.

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