Abu Dhabi’s ATIC to Acquire Chartered Semiconductor for $1.8B

Abu Dhabi’s Advanced Technology Investment Co. [ATIC], announced Sunday the acquisition of Singapore-based, and one of the world’s top dedicated semiconductor foundries, Chartered Semiconductor Manufacturing Ltd. (NASDAQ:CHRT), for a total value of $1.8 billion in cash.

Under the terms of the agreement, ATIC will pay $1.86 a share for Chartered Semiconductor, according to an ATIC statement released today. That compares with the closing price of 2.66 Singapore dollars a share on Sept. 4, and is a 14.2% premium to the company’s 30 trading-day volume weighted average price. That also represents a consideration of about $18.64 for each Chartered American depositary share. The shares closed at $18.78 in Nasdaq trading on Sept. 4.

Temasek Holdings, which owns and manages the Singapore Government’s direct investments domestically and internationally, and who currently owns 62% of the semiconductor foundry, said it “fully supports the acquisition and has signed an irrevocable undertaking to vote in support of the transaction.”

Under the proposed acquisition, Chartered Semiconductor will be combined with Globalfoundries, a venture ATIC created with Advanced Micro Devices Inc. (NYSE:AMD) last year.

“Chartered and Globalfoundries will be able to draw on each other’s strengths to enable the next generation of semiconductor innovation, utilizing the value of both companies and the intellectual capital of thousands of skilled employees,” said Ibrahim Ajami, CEO of ATIC. “Chartered and Globalfoundries are well positioned to meet the growing chip demand to come from billions of new mobile phones, cars, televisions, computers and other devices.”

Globalfoundries Chief Executive Officer Doug Grose will become CEO of the combined operations, ATIC said. Chartered Semiconductor CEO Chia Song Hwee will be COO and will be in charge of the integration of the operations.

The transaction is expected to close during the fourth quarter of this year, subject to regulatory and shareholder approval.

Morgan Stanley (NYSE:MS) Asia (Singapore) Pte. and Citigroup (NYSE:C) Global Markets Singapore Pte. Ltd. are serving as joint financial advisors to Chartered Semi. in connection with the transaction. Deutsche Bank AG’s (NYSE:DB) Singapore branch has been appointed to advise shareholders on the fairness of the offer.

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