Beijing-backed Tsinghua stake plan approved by Powertech shareholders (updated)

Powertech Technology

15/01/2016 06:39

* Taiwan polls set to bring in independence-leaning party 
    * Plan still has to gain regulatory approval 
    * More regulatory scrutiny possible under DPP's Tsai 
 
 (Adds chairman, shareholder comments) 
    By J.R. Wu 
    HSINCHU, Taiwan, Jan 15 (Reuters) - Beijing-backed Tsinghua 
Unigroup's plan to buy 25 percent of  Powertech Technology Inc 
 6239.TW  was approved by the Taiwanese firm's shareholders on 
Friday - one of three deals the frontrunner in the island's 
upcoming elections has called a "huge threat" to its chip 
industry. 
     The approval, which was expected, comes on the eve of 
national elections that are likely to usher into power the 
independence-leaning Democratic Progressive Party (DPP) after 
eight years under China-friendly President Ma Ying-jeou. 
     The plan still has to win regulatory approval and a victory 
by the DPP's presidential candidate Tsai Ing-wen could see 
Chinese investments coming under more scrutiny in future.  
     Tsai has said she is concerned Tsinghua would have too much 
control in Taiwan's chip industry, but Powertech hopes the $600 
million deal will help it gain traction in the all-important 
China market. Tsinghua would become Powertech's biggest 
shareholder.  urn:newsml:reuters.com:*:nL3N1431FD 
    "If this project is approved, it will add a lot of points 
for us, but if it is not passed it will not detract," Powertech 
Chairman D.K. Tsai told reporters. "But our growth may not be 
leapfrog growth." 
     Tsinghua also plans to acquire 25 percent of ChipMOS 
Technologies Inc  8150.TW  and Siliconware Precision Industries 
Co Ltd  2325.TW , rivals to Powertech which will hold 
shareholder meetings at the end of this month. In total, 
Tsinghua intends to invest about $2.6 billion in Taiwan's 
semiconductor sector. 
    Last month, the Chinese government said Tsinghua Unigroup's 
moves in Taiwan should not be politicised.  urn:newsml:reuters.com:*:nL3N1451HN  
    Jack Lin, a 13-year employee who holds shares in the 
company, supported the investment Friday but acknowledged the 
hurdles ahead. 
    "It will be a challenge. Under the incumbent government (the 
review) would have been smoother," Lin said. "It is out of our 
hands." 
    Powertech shares are down 8 percent since Tsinghua's planned 
investment was announced in late October, in line with the 
broader market. 
     
   
 
 (Editing by Edwina Gibbs) 
 ((jr.wu@thomsonreuters.com; +886 2 2500 4881; Reuters 
Messaging: jr.wu.thomsonreuters.com@reuters.net)) 
 
Keywords: POWERTECH TECH M&A/TSINGHUA UNIGROUP (UPDATE 1, PI