SAS-Covalent acquisition to take effect today

The China Post news staff

Sino-America Silicon Products Inc.’s (SAS) acquisition of the semiconductor unit of Japan-based Covalent Material will officially take effect today, an act that will make SAS the world’s sixth largest semiconductor wafer manufacturer. SAS signed the deal with Covalent in August last year. Under the agreement, the swapping of shares will take place today. At the same time, SAS will pay the 28 billion yen with which it has agreed to buy Covalent’s semiconductor business. With the move, Covalent’s semiconductor unit will be merged into GlobalWafers, the semiconductor arm of SAS. After the completion of the deal, semiconductor sales will account for over half of SAS’ total.

According to SAS’ 2011 financial reports, the firm’s sales totaled NT$14.856 billion last year. On a consolidated basis, the figure was NT$17.549 billion, translating into net profit of NT$428 million and earnings per share of NT$1.02. GlobalWafers, meanwhile, had sales of NT$476 million, net profit of NT$122 million, and earnings per share of NT$0.68. GlobalWafers had been making record sales up to the second quarter of last year, yet saw a decline in demand in the third quarter due to clients’ efforts to lower inventories in the midst of the international economic downturn. Yet according to SAS, orders have been on the rise since February, a situation that will contribute to a rise in GlobalWafers’ sales for the first quarter.