Chinese tech giant's Taiwan deals unravel as Powertech calls off share pact (updated)

Powertech Technology

13/01/2017 11:32

* Powertech doesn't see regulatory OK for plan in Taiwan 
soon 
    * Move is last of 3 Taiwan firms to scrap pacts with 
Tsinghua 
    * Tsinghua's $2.6 bln deal-making ends as China-Taiwan ties 
cool 
 
 (Adds Powertech statement, context) 
    By J.R. Wu 
    TAIPEI, Jan 13 (Reuters) - Taiwan's Powertech Technology Inc 
 6239.TW  said Friday it was terminating a share agreement with 
China's Tsinghua Unigroup Ltd, unravelling more than $2 billion 
in deal-making that the state-run Chinese giant had hoped to 
seal on the island.  
    Powertech, a Taiwanese chip tester and packager, said the 
plan was being scrapped because a one-year period authorised by 
its shareholders to get the deal approved in Taiwan was about to 
lapse and local regulators had yet to give a green light.  
    "In light of this, the board determined the private 
placement would not be completed within the timeframe authorised 
by shareholders," Powertech said in a statement.  
    The company said it did not rule out future cooperation with 
Tsinghua Unigroup. 
    The original deal, announced in late 2015, would have given 
the Chinese giant a quarter stake in Powertech for $600 million. 
    The termination of Powertech's share sale comes after two 
local rivals, ChipMOS Technologies Inc  8150.TW  and Siliconware 
Precision Industries Co (SPIL)  2325.TW , separately called off 
similar sale of their shares to Tsinghua Unigroup last year. 
 urn:newsml:reuters.com:*:nL4N1DV2DA 
    Tsinghua Unigroup would have invested a total of around $2.6 
billion for partial stakes in all three companies had the deals 
been successful. 
    But its failure to clinch regulatory approval on the island 
comes at a time when ties between China and Taiwan have cooled 
since Taiwan President Tsai Ing-wen and her ruling 
independence-leaning Democratic Progressive Party (DPP) took 
power last year. 
    China deems Taiwan a wayward province to be taken back by 
force if necessary, and has been pressuring Tsai to concede to 
Beijing's "one China" principle.   
    Taiwan has protected its prized chip industry from becoming 
too reliant and open to China, and Tsinghua Unigroup's 
investment plans were going to have to go through unprecedented 
parliamentary review in Taiwan, which had not yet happened. 
 urn:newsml:reuters.com:*:nL3N18E1UF urn:newsml:reuters.com:*:nL3N15I530 
    In November, Tsinghua Unigroup said via one of its units 
that its plans to take a partial share in Powertech and ChipMOS 
faced rising risks due to an ongoing regulatory review in 
Taiwan.  urn:newsml:reuters.com:*:nL4N1DQ36W 
     
     
 
 (Reporting by J.R. Wu; Editing by Alison Williams) 
 ((jr.wu@thomsonreuters.com; +886 2 2500 4881; Reuters 
Messaging: jr.wu.thomsonreuters.com@reuters.net)) 
 
Keywords: POWERTECH TECH TSINGHUA/