Taiwan wafer maker says $4.5 billion deal with German rival falls through

One of the world's largest wafer manufacturers in Taiwan said Tuesday a $4.5 billion deal to acquire a German rival had fallen through after Berlin missed the deadline.

The wafers are roughly one-millimeter thick sheets of silicon necessary for the manufacturing of semiconductors, also known as chips, the backbone of the global technology sector.

In December 2020, Taiwan firm GlobalWafers had signed an agreement with German firm Siltronic to acquire all of the company's outstanding shares at a 10% premium of approximately $4.5 billion.

GlobalWafers said in a statement that the deal needed regulatory approval from Berlin, which was still not reached by the Tuesday midnight deadline.

The takeover offer by GlobalWafers and the agreements that came into existence as a result of the offer will not be completed and will lapse, it said early Tuesday.

The CEO Doris Hsu said GlobalWafers will work to analyze the non-decision by Berlin.

Siltronic confirmed that no clearance certificate had been issued by Germany's Federal Ministry of Economics and Climate Protection.

GlobalWafers will pay Siltronic a termination fee of €50 million $56.1 million German politicians expressed support for the government's decision to drop the deal, according to local business newspaper Handelsblatt Tuesday.

Hannes Walter, vice chairman of the Economics Committee, said that we do not gain technological sovereignty by selling off our silverware.

Julia Klockner, an economic policy spokeswoman for the CDU CSU parliamentary group, said the move was right to keep our security interests in mind. With growing national security concerns and supply chain crunch because of the Pandemic, governments are increasingly scrutinizing huge takeovers in the global technology industry.

U.S. regulators have filed a lawsuit in December to block the merger of graphics chip star Nvidia with mobile chip tech powerhouse Arm Ltd.

The Federal Trade Commission said it was a concern that it could provide one of the largest semiconductor companies with control over computing technology and designs that rival firms rely on to develop their own competing chips.