Chip giant backed by France circles Newport Wafer Fab as bidding war looms
source link: https://www.telegraph.co.uk/business/2023/06/10/chip-giant-backed-by-france-circles-newport-wafer-fab/
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Chip giant backed by France circles Newport Wafer Fab as bidding war looms
Nexperia opens books to bidders after being ordered to sell microchip factory
Nexperia has launched a legal challenge to the Government’s demand that it sell the Newport facility
Credit: Matthew Horwood/Getty Images
A microchip giant backed by France and Italy is among a clutch of businesses circling Britain’s biggest semiconductor facility after ministers ordered its Chinese owners to sell the plant.
STMicroelectronics, the Dutch semiconductor company which is partly owned by the French and Italian governments, and GlobalFoundries, whose biggest shareholder is Abu Dhabi’s sovereign wealth fund, are believed to have expressed a potential interest in Newport Wafer Fab. They are among as many as 10 potential bidders.
Nexperia, which acquired the facility in 2021, is understood to have opened the books to interested parties despite pressing ahead with a legal challenge to the Government’s demand that it sell the facility.
Former business secretary Grant Shapps ordered Netherlands-headquartered Nexperia, which is owned by Chinese tech company Wingtech, to sell the facility last year due to national security concerns.
Bidding is likely to be complicated by exclusivity arrangements held by former owner Drew Nelson, who is also seeking to buy back the fab.
Mr Nelson has been working on a bid to buy back the plant alongside the London investment firm Palladian, in what would be presented as a UK-led alternative to overseas buyers which would be focused on high-tech compound semiconductors. Private equity groups are also believed to have expressed an interest.
Then-business secretary Grant Shapps ordered Nexperia to sell the facility last year
Credit: Leon Neal/Getty Images
Nexperia is seeking to overturn the order to sell the plant, with a judicial review scheduled for the autumn.
Government officials are understood to have previously discussed providing taxpayer support for a buyout. The National Security Strategic Investment Fund, a body linked to GCHQ and run by the British Business Bank, has been mooted as one potential source of capital although it is unclear if this is still on the table.
Nexperia hired Atreg, an advisory firm that specialises in selling semiconductor plants, in April.
The company confirmed it has been in discussions with possible buyers.
A spokesman said: “Whilst we await the outcome of the Judicial Review process, Nexperia has appointed advisers to explore the potential future sale of its Newport manufacturing site.
“As part of that process, Atreg has been privately briefing a number of potentially interested parties. Our priorities remain unchanged – to look after the impacted employees at Nexperia Newport and to secure supply for our customers. This appointment has been made with those priorities in mind.
“Nexperia remains fully committed to the Judicial Review process and still strongly disagrees with the UK Government’s November 2022 divestment order, not accepting any of the national security concerns raised.”
The company is believed to have opened a “data room” which gives prospective bidders access to a detailed look at its finances and assets.
One industry source said that US-listed STMicro and GlobalFoundries would be seen as natural potential bidders for the facility, with deep pockets and industry links to make it a commercial success. Another suggested the companies were more focused on the EU and US, where heavy subsidies are available.
The companies did not respond to requests for comment.
The French and Italian states are the biggest shareholders in STMicro, each owning a 13.8pc stake.
Nexperia has claimed the plant could be forced to shut if the company was forced to sell it. Nexperia acquired the 86pc of Newport Wafer Fab it did not own for around £63m in 2021 after the facility fell into financial difficulty.
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