Jiangsu Changjiang Electronics Technology Co. (600584), China’s biggest chip tester, offered $780 million to acquire unprofitable Singaporean competitor Stats ChipPac Ltd. (STAT)

JCET will begin 30-day exclusive talks to acquire Stats ChipPac after making a non-binding offer for the company, the target said in a stock exchange filing today. The deal won’t include Stats ChipPac’s units in Taiwan, the filing showed.

The purchase of Stats ChipPac, the world’s fourth-largest provider of chip packaging and testing, would add to the $26 billion of semiconductor deals in the past year, according to data compiled by Bloomberg. Chinese President Xi Jinping has pledged financial support to the country’s chip industry as he seeks to reduce reliance on foreign companies for key technologies.

“This purchase fits well into the government’s strategic direction,” said Rick Hsu, an analyst at Daiwa Securities Capital Markets in Taipei. “It can also help complement Changjiang’s technology road map.”

Temasek Holdings Pte, Singapore’s state investment company, owns an 84 percent stake in Stats ChipPac, according to data compiled by Bloomberg. Citigroup Inc. is advising Stats ChipPac on the transaction.

Stats ChipPac was suspended from Singapore trading on Nov. 3, the same day JCET’s shares were halted in Shanghai. The Singapore company has asked for its shares to resume trading tomorrow.

By: DocMemory
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