LX Group, SK hynix emerging as candidates for Magnachip Semiconductor Magnachip originated from LG Semiconductor

Translated by Kim So-in 공개 2022-04-29 08:05:23

이 기사는 2022년 04월 29일 08:04 thebell 에 표출된 기사입니다.

South Korea’s LX Group and SK hynix are emerging as strong candidates to acquire U.S.-listed chipmaker Magnachip Semiconductor.

LX Group is considering buying Magnachip, according to industry sources. South Korea’s Kolon Group has recently stopped studying the acquisition.

The sale of the chipmaker started drawing attention from domestic strategic investors and financial investors at the end of last year. Magnachip had signed a stock purchase agreement with Chinese private equity firm Wise Road Capital, but the $1.4 billion merger agreement was canceled after the U.S. government blocked the deal.

After that, South Korea’s Samsung Electronics, SK hynix and LX Group have been mentioned as candidates to acquire Magnachip as they operate businesses to create synergies with the company.

Magnachip originated from LG Semiconductor. In 1999, LG Semiconductor was merged into Hyundai Electronics in a deal led by the government.

LX Group Chairman Koo Bon-joon was then chief executive of LG Semiconductor. If LX Group purchases the company, it coould create synergies between Magnachip and its major affiliate LX Semicon, formerly Silicon Works, which LG acquired in 2014.

Hyundai Electronics later changed its name to Hynix Semiconductor and sold its non-memory semiconductor operations, which started its business as Magnachip Semiconductor. Hynix Semiconductor is now SK hynix. Magnachip is currently owned by U.S.-based Oaktree Capital Management and other investment firms.

SK hynix is also considered a strong candidate to take over Magnachip. It already purchased 100% of Key Foundry, a spin-off of the foundry division of Magnachip. SK hynix is currently awaiting China's approval for the takeover.

If SK hynix joins the race for Magnachip, the likelihood of the deal being struck will go up as its previous negotiations with Magnachip had succeeded. The sale of Magnachip is considered a challenging deal as the company is listed on the New York Stock Exchange, with many stakeholders involved.

Large companies are expected to continue studying the deal given Magnachip’s high growth potential. Magnachip consists of display and power businesses. (Reporting by Hyo-jung Lim)
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