Editing by David Du

Wise Road Capital, a Chinese private equity (PE) firm, received unconditional clearance from the Chinese antitrust authority, the State Administration for Market Regulation (SAMR), in late June to purchase South Korea-based MagnaChip Semiconductor (MagnaChip).

Source: The internet

The acquisition has been pushed back by the South Korean and the U.S. governments after MagnaChip announced its agreement with the Chinese PE firm for a $1.4 billion takeover on March 27.  

South Korea’s Ministry of Trade, Industry and Energy (MOTIE) considered the transaction involved a “national core technology,” making it difficult to reach a foreign shore. And the Committee on Foreign Investment in the United States (CFIUS) carried out a government review to prevent the two companies from closing their deal.

In response, MagnaChip said on June 4 that it would assist the South Korean and the U.S. governments in conducting their reviews. But it also pointed out the deal did not need approval from either side. 

Business insiders told JW Insights that with CFIUS’s involvement, the deal could be difficult to go through. The South Korean government may block the deal based on “national security” concerns.

MagnaChip is a South Korean company that spun off from SK Hynix in 2004. It specializes in making display driver integrated circuits (DDICs) for organic light-emitting diode (OLED) panels. The company began trading on the New York Stock Exchange (NYSE) in 2011.