Capital Hot Dance "China core" year or now many international mergers and acquisitions

The blockbuster policy is driving the domestic chip industry's investment and merger enthusiasm.

Recently, the United States digital imaging chip maker Howe Technology (hereinafter referred to as "OV"), has received the Chinese Hua Capital Management Ltd., led by an investment consortium of 29 U.S. dollars per share, a total value of about 1.67 billion dollars in a cash takeover offer. According to the industry, "the first financial daily" revealed that the Hua Capital Management Ltd. is actually the Beijing government guidance Fund in the design and Testing fund Management unit Qing-core.

Isuppli Wenjun to "the first financial daily," said the acquisition by the Chinese leadership, the semiconductor field of work for many years in the professional team, Shanghai Pudong Technology Investment Co., Ltd. is also a participant. He said that with many factors, there will be more international mergers and acquisitions in the second half to next year, with one to two this year.

According to China's Semiconductor Industry Association statistics, the first quarter of 2014 China's integrated circuit industry sales of 58.75 billion yuan, an increase of 13.4%. Among them, the design industry and packaging testing industry is growing rapidly.

1.7 billion dollars behind the consortium

OV produces chips for smartphones and Tablet PC cameras (lenses). OV said it received an offer from a Chinese consortium for a takeover bid of about 1.7 billion dollars.

"The first half of this year ov and domestic capital, but has not been discussed." The stock price never came down after the news. Wenjun to reporters, the Beijing fund to come forward, professional team trader, took the first step, explained the importance of management fund company professionalism. Semiconductor is a highly specialized industry, investment is actually a high-risk, difficult job. Without a professional team to operate, not only does not have the investment income, will also have the negative effect to the industry.

Yanhui, the Secretary-General of the Chinese Federation of mobile phones, said to reporters that the acquisition has been in the circle for several months, Pudonko cast in conjunction with the CEC to acquire the LAN technology after the merger to OV issued an offer, before the acquisition completed with the Wuhan new core integration. "But it's also hearsay."

Wenjun The speculation, he told reporters that the current acquisition and Wuhan New Core is not too much association. It is reported that Pudonko investment in this acquisition is with the core of the company to cooperate, and Tsinghua Holding is only the core of China's capital investment party.

For the offer price of the acquisition, Wenjun that 1.67 billion dollars is not high.

"The OV2014 fiscal year sales were 1.454 billion dollars. 1.67 billion dollar quote on the marketable sales rate of 1.15, p/E 17.05, not too high, but in the long term, the price is high, one is ov in the Apple lost big single, in the chip high-end field of development prospects are not optimistic, the second is the company's low gross margin, in the domestic handset market share is low, taking into account the domestic handset manufacturers and Geco The rapid rise of such domestic companies as OV is cautious about the future of the company, regardless of the integration factor. "Wenjun believes that if the Beijing fund mergers and acquisitions success, will be in the CIS field to form North ov, South has Geco" tale of a city. " This is another big leap in Beijing's integrated circuit industry; Beijing has changed the pattern of lagging behind Shanghai in the chip field through funds and mergers.

And this is Pudonko after the exhibition, RDA, LAN technology launched after the fourth foreign mergers and acquisitions big single. Pudonko is a wholly state-owned venture capital company established in June 1999 by the Pudong New Area government.

However, even if both parties are interested, the takeover offer will also face scrutiny by the US Foreign Investment Commission (CFIUS). In the past, Chinese companies have been subject to scrutiny over acquisitions of U.S. technology companies, particularly in relation to cybersecurity concerns and concerns that some technologies may be used for military purposes.

Capital Hot Dance Chip industry

"At present, there is a market, resources, the Government also support, for international enterprises, there is technology, high-end talent, have advanced management experience, the opportunities for cooperation between the two sides is quite a lot." Wenjun to reporters that the second half of the international level of mergers and acquisitions will appear one to two, to the next year will be more.

Earlier, he had received a letter from the executive vice president of the world's top four semiconductor companies to inquire about a series of "actions" launched against semiconductors in the country.

It is understood that June 24 this year, the State Council approved the implementation of the "National integrated circuit industry Development platform" officially announced, proposed including the establishment of national leadership team, the State Industrial Investment fund, including 8 of the promotion measures.

Yanhui, the Secretary-General of the China Alliance for mobile phones, says this is a "pay-for-policy" combination, and the country's policy expectations of supporting the semiconductor industry have stirred up investment enthusiasm for the concept of chip stocks. From the current point of view, the City of science and technology to go from the Nasdaq, the future to seek a A-share listing path. This is also the case with the Pudonko of the Violet Group and the company.

In fact, this series of actions has attracted the discussion of the Taiwan industry. Wenjun said that the cross-strait cooperation is a lot, with the help of the development of mainland semiconductors, Taiwanese enterprises can develop better. Cooperation is far superior to confrontation, integration is more isolated.

"But some companies think government-backed companies are somewhat unfair to the competition," he said. Wenjun said, in fact, the government for Chinese and foreign enterprises are non-discriminatory, China's semiconductor market has accounted for two-thirds of the world, many enterprises should be integrated into the domestic development. He told reporters that there are already many international giants have seen the integration trend is taking part in, including Intel and Rui core cooperation, as well as Qualcomm and SMIC and Samsung investment in the territory.

More news that, because of the feeling of "love" in the U.S. investment circle too little, coupled with the financial incentives from the Chinese government, some of China's amorphous chip manufacturers are ready to withdraw from the Nasdaq Stock Market (NASDAQ), back to the "home" to become a state-owned enterprises.

But Wenjun does not agree. He said that the current occurrence of the four mergers and acquisitions, in fact, are corporate behavior, are the government only know after the occurrence. "Perhaps because of the strength of the Chinese government, industry can do anything that could be a cap on government will," he said. This is a bit unfair to Chinese industry. "Wenjun said.

And for the acquisition of OV, wenjun that in fact very difficult. "As individuals who have taken part in several mergers and acquisitions, sensibility and intuition tell me that the merger is more difficult than ever, and that the process is not going well," he said. But if the acquisition succeeds, to the OV in the mainland downstream of the industrial chain will be big positive. For example, packaging plant crystal side technology, on behalf of the factory Core international. Wenjun told reporters.

OV has said it is evaluating the offer and has hired JPMorgan securities firm as its financial advisor.