China’s Wingtech Technology, the world’s largest original design manufacturer (ODM) for smartphones, is purchasing more shares in Nexperia Holding for over 6.33 billion yuan ($893 million), further cementing its control of the Dutch semiconductor business.
Wingtech, which manufactures telecom equipment for clients such as Huawei and Xiaomi, plans to buy an additional 23.77 per cent stake in a special purpose vehicle (SPV) created for the purpose of owning its stake in Nexperia, Wingtech disclosed in a filing with the Shanghai Stock Exchange (SSE) on Wednesday.
The investment will increase its stake in the SPV from 74.46 per cent to 98.23 per cent, shows the filing. The company will purchase the additional shares from four general partners (GPs) and four limited partners (LPs) that indirectly own shares in the SPV.
Wingtech plans to pay 150 million yuan ($21 million) in cash, while the remaining 6.18 billion yuan ($872 million) will be settled through the issuance of nearly 68.27 million shares at a price of 90.58 yuan ($12.77) apiece. These shares will have a lock-up period of 12 months, according to the filing.
The update comes a few months after Wingtech completed the acquisition of a 79.98 per cent stake in Nexperia at a staggering amount of more than 26.85 billion yuan ($3.79 billion) in December 2019. This deal is by far the largest merger and acquisition (M&A) in the Chinese semiconductor industry.
Zhang Xuezheng, chairman of Wingtech as well as the current chairman of Nexperia’s management board, was named the new CEO of Nexperia, following the early retirement of the Dutch firm’s former CEO, Frans Scheper.
“I am proud of what Nexperia has become and will miss the team. At the same time, I have decided not to seek a prolongation of my four-year tenure. Now is the time for Wingtech to decide on Nexperia’s future leadership,” said Frans Scheper in a statement this week.
Nexperia, the former standard products division of Nasdaq-listed NXP Semiconductors, was spun off from the parent firm in February 2017 after a $2.75 billion buyout by a consortium of financial investors including China’s JAC Capital and global private equity firm Wise Road Capital.
The company specialises in high-volume production of discrete and MOSFET and GaN FET components, as well as analogue and logic integrated circuits (ICs) for the automotive industry. With a production capacity of more than 90 billion essential semiconductors annually, it has over 11,000 employees across Asia, Europe and the United States.