SK hynix acquires Key Foundry for $493 mil Korean chipmaker needs to obtain antitrust approvals in several countries

Translated by Kim So-in 공개 2021-11-02 08:07:54

이 기사는 2021년 11월 02일 08:04 thebell 에 표출된 기사입니다.

South Korea’s SK hynix has inked a deal to acquire 100% of domestic foundry firm Key Foundry, one and a half years after it made its investment in the country's leading foundry chip manufacturer.

SK Group's semiconductor unit agreed on Friday to acquire a 100% stake in Key Foundry for 575.8 billion won ($493 million) in partnership with Magnus Private Equity Fund, industry sources said. It is said law firms Kim & Chang, which represented SK hynix, and Lee & Ko, which represented the general partner, signed the contract on behalf of them.

The deal came six months after SK hynix hired its legal advisor and started negotiations in May. Last year, Alchemist Capital Partners Korea and Credian Partners created a fund to take over Key Foundry and SK hynix invested in the fund to own a 49.76% stake in the company.

“SK hynix initially wanted to acquire Key Foundry, but chose to invest in the company indirectly due to uncertainties over the 8-inch wafer market,” said an industry source. “The company now acquired the company thanks to a booming 8-inch wafer market since last year.”

SK hynix will only pay the down payment at the time of signing the contract, with the remaining amount expected to be paid after the company gets approvals from competition authorities.

The chipmaker is required to obtain antitrust approvals in major countries, including China, the United States, the European Union (EU), and the U.K. Some are concerned that the deal may collapse in the worst-case scenario in which the deal fails to get the nod in China. SK hynix’s planned acquisition of Intel’s flash NAND and SSD business has also been pending approval in China even after it got the green light from seven countries.

SK Group is also mulling over how to change Key Foundry’s governance structure. Over the last six months, SK hynix has reviewed a various possible scenarios, including combining SK hynix System IC, a wholly-owned subsidiary of the chipmaker, with Key Foundry, and creating a non-memory business unit under SK hynix.

SK Group may also carve out the foundry business from SK hynix given the strong growth potential of the foundry business.

SK Telecom and SK Square are officially separated into two entities on Monday, with the latter overseeing 16 of SK Telecom's existing non-telecom and tech units, including SK hynix. (Reporting by Hye-ran Kim)
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