ST Assembly Test Services (STATS) and ChipPAC, Inc have announced the signing of an agreement for the companies to merge in a stock-for-stock transaction valued at $1.6 billion.
According to a statement, the merger will create one of the world’s premier independent semiconductor assembly and test solutions companys.
Under the terms of the agreement, ChipPAC shareholders will receive 0.87 STATS American Depositary Shares (ADS) for each share of ChipPAC common stock. STATS and ChipPAC shareholders will own approximately 54% and 46% of the combined company, respectively. The combined company expects to have over $1 billion in revenues in 2004.
‘This merger will enable the combined company to be a global player who can provide fully integrated, multi-site, unparalleled end-to-end assembly and testing solutions, by combining the testing excellence of STATS with the package development and manufacturing assembly excellence of ChipPAC,’ said Tan Lay Koon, CEO and President of STATS.
‘We will be a leader in the fastest growing markets – communications, consumer and multi-applications – with significant exposure to the important computing and industrial segments. Nearly every major semiconductor company will be our customer,’ added Lay Koon.
Dennis McKenna, president and CEO, ChipPAC commented, ‘We will be the only global player with major manufacturing facilities in all of the world’s major foundry hubs – Taiwan, China, Korea and Singapore. This is another differentiating factor for the combined entity, as it allows us to provide total supply chain solutions for our major customers.’
The boards of directors of both companies have approved the agreement. The transaction is subject to customary regulatory approvals and is expected to close by the end of the second quarter of 2004.