The acquisition of Magnachip was blocked, the acquisition of the ASE factory, and the acquisition of Ziguang Group, the investment layout of Zhilu Capital!
Zhilu Capital's investment layout road
On December 14, Zhilu Capital’s acquisition of MagnaChip was forced to terminate because it had not been approved by the Committee on Foreign Investment in the United States (CFIUS), and many people in the industry were quite dissatisfied with it.
In recent years, Zhilu Capital has been very popular in the semiconductor industry because it has successfully completed many overseas mergers and acquisitions. The most classic is the acquisition of Nexperia in 2017. Since the beginning of this year, in addition to MagnaChip, Zhilu Capital has also acquired four factories of ASE , A few days ago, it has also confirmed that it will form a consortium with Jianguang Capital to become a strategic investor in the merger and reorganization of Ziguang Group.
For the development of China’s semiconductor industry, capital plays a very important role. Whether overseas mergers and acquisitions or investing in outstanding domestic companies, it can greatly promote the development of China’s semiconductor industry. However, from the current situation, Chinese capital is Semiconductor mergers and acquisitions will become increasingly difficult, especially those involving core technology.
Blocked acquisition of South Korean semiconductor companies
On March 27 this year, South Korean semiconductor manufacturer Magnachip announced that it agreed to be acquired by the private equity investment company Zhilu Capital at a price of 29 US dollars per share, for a total of 1.4 billion US dollars (approximately RMB 9.158 billion). However, the acquisition is now forced to terminate.
Source: Magnachip
According to previous reports, South Korea and the United States initiated investigations into the acquisition of Magnachip by Zhilu Capital in April and May. After investigations, South Korea believes that Magnachip's OLED DDIC is a national core technology, and CFIUS of the United States determined that the transaction sold by Magnachip poses a national security risk. . These judgments directly led to the termination of the transaction.
Magnachip is the world's largest independent OLED display driver chip (DDIC) manufacturer, with a global market share of 33.2% in 2020. Its customers mainly include Samsung and LG Display, as well as a number of smartphone OEM manufacturers. Therefore, if Magnachip can be successfully acquired, it is equivalent to a big leap for China in the OLED DDIC market.
However, even if the acquisition is not completed, this will not have much impact on China’s breakthroughs in this technology field. According to industry analysts, OLED DDIC is really not a core technology. Chinese manufacturers have already made breakthroughs in this field. The gap is narrowing and it is only a matter of time before it can catch up with Magnachip.
The termination of the acquisition reflects the issue that needs more attention. In recent years, with China’s rapid growth in the high-tech field, the United States has become more and more vigilant. The United States has suppressed the development of China’s high-tech industry in various ways in recent years. , Including restricting the export of products and equipment with American technology to China, and blocking overseas mergers and acquisitions of semiconductor companies by Chinese capital. It is conceivable that in the future, overseas mergers and acquisitions by Chinese capital will become increasingly difficult.
Leading the merger and reorganization of Ziguang Group
However, for Zhilu Capital, it may be more important at present to concentrate funds and manpower to complete the merger and reorganization of Ziguang Group. On the evening of December 10, Ziguang Guowei issued an announcement saying that Beijing Zhilu Asset Management, Beijing Jianguang Asset Management and other components The consortium became a strategic investor in the substantive merger and reorganization of seven companies including Ziguang Group.
Although Ziguang Group is currently affected by debt and needs to merge and reorganize, Ziguang Group is still a representative large-scale enterprise in the field of integrated circuits in China. Its ability to quickly and successfully complete reorganization is not only important for Ziguang Group, but also for the entire China The semiconductor industry is also of great significance, and the importance of Zhilu Capital and Jianguang Capital in this is self-evident.
The most urgent task is to pay off debts. According to statistics, the creditors' meeting of Ziguang Group confirmed a total of approximately 142.6 billion yuan in creditors. In response to the current debt situation, the Zhilu Jianguang Consortium has quickly issued a repayment plan, giving creditors the right to "choose one of three". Creditors can choose between "cash + stocks + three-year debt retention", "cash + stocks + five-year retention Choose one of the three options of "debt" and "cash + eight-year retention of debt", and finally achieve 95% to 100% repayment.
It is reported that Zhilu Jianguang's cash repayment ratio for ordinary debt has reached 40%, and the stock resources that can be used for debt repayment include Ziguang Co., Ltd. 18.45% stock, Ziguang Guowei 6.39% stock and Xueda Education 18.73% stock, and the stock repayment is completely at the market price. For debt repayment, the portion other than cash + stocks is fully retained, and the retained debt interest rate ranges from 2.695% to 4.65%.
Industry insiders pointed out that Zhilu Jianguang has long-term investment experience in the semiconductor field. It can also show its ability to solve related problems from its quick settlement plan, and the faster the debt settlement is completed, the entire restructuring process will also speed up This is more conducive to Ziguang Group's rapid return to the road, so as not to miss market opportunities.
In addition, Zhilu Capital’s previous investment covers multiple links in the semiconductor industry chain, which can form an upstream and downstream cooperative relationship with Ziguang Group and its subsidiaries, which is beneficial to the various assets of Ziguang Group and Zhilu Capital. Coordinated development.
Zhilu Capital's semiconductor investment layout
Wise Road Capital was established in May 2017. It is a global private equity fund management company. Since its establishment, it has publicly issued and managed 30 funds, mainly focusing on semiconductor core technology and other emerging high-end technology investment opportunities.
According to its official website, Zhilu Capital’s key investment direction is the SMART field, namely Semiconductor Value Chain, Mobile, Automotive Electronics, Robotics and Smart Manufacturing, IoT (Internet of Things).
Yang Fei, a partner of Wise Road Capital, once stated that in the entire semiconductor and high-tech industry investment plan, Wise Road Capital’s investment idea is to choose a company with advanced technology and healthy financial performance in the semiconductor field, and the target company is already in Europe and the United States. The market has been very successful, and this business can be further strengthened and expanded in China.
Based on such investment ideas, Zhilu Capital has completed many overseas investment acquisitions since its establishment, including NXP Semiconductors. In 2017, Zhilu Capital led the US$2.75 billion acquisition of NXP’s NXP Semiconductors. This is so far in China. The largest overseas semiconductor merger and acquisition. Subsequent Anshi Semiconductor successfully merged into the listed company Wingtech, and its performance has been greatly improved after the integration. This acquisition not only earned the company several times the return, but also strengthened China's development in the field of semiconductors.
Since the beginning of this year, Zhilu Capital has invested more frequently in the semiconductor field. In November, it announced the successful acquisition of ePAK, the world’s top four semiconductor carrier supplier. According to related reports, there is currently no mature semiconductor carrier supplier in China. It is of strategic significance to make up for the shortcomings of domestic vehicles and ensure the safety and control of the industrial chain.
On December 1st of this year, Zhilu Capital successfully acquired its direct or indirect holding of ASE Semiconductor Packaging and Testing (China Four packaging and testing plants in Hong Kong and the Mainland (located in Suzhou, Shanghai, Kunshan and Weihai respectively).
Through this acquisition, Zhilu Capital has further improved its layout in packaging and testing and the semiconductor industry chain. In the packaging and testing process, Zhilu Capital established a joint venture with packaging and testing equipment supplier ASM in July 2020, and in September 2020, it wholly acquired the world’s seventh largest integrated circuit packaging and testing company Singapore United Technology Corporation ( UTAC).
It can be seen that the companies acquired by Zhilu Capital in semiconductors are all very good companies in their respective fields. This can actually enhance the development of China's semiconductor industry in many aspects, or make up for the gaps in China's semiconductor technology in a certain field, or It can develop in coordination with existing technology companies, or it can increase China's market share and position in a certain field of semiconductors.
