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SMIC Acquires Full Control of SMNC in $5.79 Billion Deal
30 Dec
Summary
- SMIC is set to acquire the remaining 49% stake in its SMNC unit.
- The transaction is valued at 40.6 billion yuan, equivalent to $5.79 billion.
- The acquisition will be funded by issuing new A-shares to SMNC shareholders.
Semiconductor Manufacturing International Corporation (SMIC), China's premier foundry, has unveiled plans to acquire the complete 49% stake it does not already own in its subsidiary, SMNC. This significant transaction is valued at 40.6 billion yuan, which translates to approximately $5.79 billion. Upon completion, SMNC will operate as a fully owned entity under SMIC.
The acquisition method involves SMIC issuing 547.2 million A-shares. These shares will be distributed among five SMNC shareholders. Notably, this group includes the influential National Integrated Circuit Industry Investment Fund, a key player in China's semiconductor ambitions. This share issuance strategy underscores a move towards consolidation within SMIC's structure.
This strategic consolidation is expected to enhance SMIC's operational efficiency and market presence. By achieving full ownership of SMNC, SMIC aims to better integrate its capabilities and capitalize on the growing demand for advanced semiconductor manufacturing. The deal reflects a broader trend of domestic consolidation within China's critical tech sectors.
