Yageo secures syndicated loan to acquire American rival

Taipei,  Yageo Corp., Taiwan’s largest passive electronics component maker, has secured a syndicated loan of a record NT$48.5 billion (US$1.62 billion) to fund its acquisition of an American competitor.

Yageo, which produces components such as chip resistors, inductors and multi-layer ceramic capacitors (MLCC), signed an agreement Tuesday with 22 banks for the loan, which will be used to acquire American rival Kemet Corp. at a cost of US$1.64 billion.

The syndicated loan, the largest one obtained by a Taiwanese company in two years, was led by six local and foreign banks — Bank of Taiwan, Mega International Commercial Bank, First Commercial Bank and Hua Nan Commercial in Taiwan and DBS Bank in Singapore and Mizuho Bank in Japan, according to Yageo.

The manufacturer said it obtained about 60 percent more than expected because the banking sector and the local market were enthusiastic about the acquisition.

Earlier, the company had raised US$830 million from sale of global depositary receipts and convertible bonds, part of which it said would go toward the acquisition of Kemet, while the rest would be used as working capital.

The acquisition deal is expected to be completed in the third quarter, Yageo said, adding that it has already secured the approval of anti-trust authorities in Austria, Germany, Taiwan, the United States and China.

After the acquisition, Yageo said, it expects to see its sales double and its profits increase by about 80 percent, which will consolidate its position as the third largest MLCC in the world and solidify its share of the automotive electronics market.

Kemet has a workforce of 14,000 at 23 plants in 22 countries across Europe and Asia and in the U.S., according to Yageo.

In 2018, Yageo acquired another American company, Pulse Electronics Corp., for NT$22 billion.

 

Source: Focus Taiwan News Channel

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