Siltronic Sale to GlobalWafers Looks Shaky

18.01.2022 - GlobalWafers’ planned takeover of Wacker Chemie’s remaining 30.8% stake in silicon wafers manufacturer Siltronic is looking somewhat shaky as the German economics ministry – following a year’s review of the plans – apparently remains unconvinced that the $5.3 billion deal is in the national interest.

The Munich-based chemical producer first took Siltronic public in 2015 and sealed the transfer of its remaining assets to GlobalWafers in December 2020. The economics ministry has been reviewing the plans ever since.

From a foreign relations perspective, the sale of German assets to a Taiwanese firm is regarded in some quarters as sensitive due to increasing tensions between Taiwan and China, which regards the island nation as part of its territory.

Additionally, Berlin is thought reluctant to cede control over a high-tech industry to a foreign power, especially as it has been accused of foot dragging on digitalization of industry. In this case, the country would be dependent on Taiwan for semi-conductor supply.

The takeover plans already have been approved by regulatory authorities in Europe (including Germany’s Federal Cartel Office), the US, South Korea and Japan. GlobalWafers has hinted that China’s green light is merely a technicality. Now, time is of the essence as the transaction cannot close if the ministry does not issue the clearance by Jan. 31.

In a Jan. 14 filing, Siltronic described the guidance from the ministry, which under new Green party minister Robert Habeck has been renamed Federal Ministry for Economic Affairs and Climate Action, as “opaque.” The company and the proposed future owner said they had received no information as to whether and under which conditions a clearance might be granted.

GlobalWafers and Siltronic are said to have offered a range of remedies to push the sale through. According to the Bloomberg news agency, these included granting the German government special voting rights via a “golden share” as well as ways to undo the purchase or sell key assets back to the country.

In an attempt to allay some of the government’s fears, GlobalWafers said in a statement that the transaction would be “immensely beneficial” for Germany and Europe as it would “secure much needed investment and knowhow and would be a very strong and reliable partner to Europe’s semiconductor industry.”

Following a successful transfer, the Taiwanese company would become the world’s second largest supplier of silicon wafers to the electronics industry behind Japan’s Shin-Etsu.

Author: Dede Williams, Freelance Journalist