U.S. chipmaker Magnachip, China's Wise Road end $1.4 bln merger deal (updated)

MagnaChip Semiconductor

13/12/2021 22:59

(Adds background on deal, shares, termination fee)
    Dec 13 (Reuters) - Chinese private equity firm Wise Road
Capital and U.S. chipmaker Magnachip Semiconductor Corp  MX.N 
have terminated their $1.4 billion merger agreement struck in
March, the companies said in a joint statement on Monday.
    The U.S. Treasury Department had said in August the deal
posed "risks to national security", while the Committee on
Foreign Investment in the United States (CFIUS) had ordered the
deal to be put on hold in June. 
    "This course of action resulted from the inability of the
parties, despite months of effort, to obtain CFIUS's approval
for the merger," Wise Road and Magnachip said on Monday.
    Magnachip will get a termination fee of $70.2 million,
according to the statement. Its shares were down 1.8% at $16.81
in extended trading.
    The semiconductor firm also said it had adopted a
limited-duration shareholder rights plan "to allow adequate time
to evaluate all options".

 (Reporting by Niket Nishant in Bengaluru; Editing by
Ramakrishnan M.)
 ((Niket.Nishant@thomsonreuters.com;))