Magnachip Semiconductor Corp., the parent of Magnachip Semiconductor Ltd, and South Dearborn Ltd, a company incorporated in the Cayman Islands, and Michigan Merger Sub Inc., a Delaware corporation—which are investment vehicles established by Wise Road Capital Ltd and certain of its limited partners, received permission from the Committee on Foreign Investment in the United States (CFIUS) to withdraw their joint CFIUS filing in relation to their proposed transaction (merger) and will be terminating their previously announced definitive merger agreement.

This course of action resulted from the inability of the parties, despite months of effort, to obtain CFIUS’s approval for the merger. In connection with the termination of the merger agreement, South Dearborn will pay the company a termination fee of $70.2 million, of which $51 million will be paid promptly and $19.2 million will be deferred up to March 31, 2022. In connection with the termination of the merger agreement, the parties will be releasing each other from all obligations with respect to the proposed merger transaction as well as from any claims arising out of or relating to the merger agreement.

The company also intends to have Magnachip Semiconductor, the Korean operating subsidiary of the company, withdraw its application concerning the merger that had been submitted to the Korean Ministry of Trade, Industry and Energy under Article 11-2 of the Act on Prevention of Divulgence and Protection of Industrial Technology.

“While we are disappointed by the termination of our merger agreement, we are confident that Magnachip remains well positioned to create value for our shareholders as an independent public company,” said YJ Kim, Magnachip’s Chief Executive Officer. “This outcome does not impact the sound long term fundamentals of our business and our ability to accelerate our MX 3.0 strategy. In fact, over the past eight months our team has continued to advance our previously announced 2020-2023 plans for sustainable and profitable growth. We will share further details about the plan progress on a call that will be scheduled for January 6th, 2022. I would like to thank our customers for their ongoing trust and Magnachip’s employees for their commitment to delivering industry-leading products.”

By: DocMemory
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