ASE unit to acquire 2nd-largest EMS supplier in Europe

Taipei, Dec. 13 (CNA) ASE Technology Holding Co., the world's largest integrated circuit (IC) packaging and testing services provider, has agreed to acquire through a subsidiary the France-based Asteelflash Group, the second-largest electronics manufacturing service (EMS) supplier in Europe, for US$450 million.

Universal Scientific Industrial (Shanghai) Co. Ltd., one of ASE's major units, on Thursday signed an agreement with Financiere AFG SAS (FAFG), which owns an almost 100 percent stake in Asteelflash, for the acquisition.

Analysts said the acquisition shows ASE's ambition to extend its reach worldwide and expand the production of devices for use in automotive electronics by taking advantage of the strengths of Asteelflash.

ASE Chief Financial Officer Joseph Tung (董宏思) said his company will pay for the transaction in cash to obtain an 89.6 percent stake in Asteelflash, while Universal Scientific Industrial will pay the remaining 10.4 percent stake through a stock swap with FAFG.

Tung said the acquisition is pending approval from anti-trust authorities in China, the United States and the European Union, adding that the deal is expected to be completed in the third quarter of next year at the earliest.

After the acquisition, Asteelflash will come under the Universal Scientific Industrial corporate umbrella, although the existing management will be retained.

According to ASE, Asteelflash has 17 production sites in eight countries around the world, providing devices for use in a wide range of applications such as automotive electronics, energy management, the Internet of Things and data management.

ASE said Universal Scientific Industrial is expected to make good use of Asteelflash's production sites, in particular in Tunisia, Czech Republic, Poland and Mexico, where the French firm is most competitive.

In addition, through Asteelflash's production bases in France, Germany, the United Kingdom and Silicon Valley in the United States, Universal Scientific Industrial is expected to get closer to its clients and provide timely and better services.

Tung said Asteelflash excels at providing customized items in small amounts, and now has a base of about 200 customers, adding that it posted profit of between US$70 million and US$80 million in 2018, on sales of about US$1 billion.

Currently, Asteelflash is among the top 20 EMS suppliers in the world, Tung said.

Commenting on the acquisition, Universal Scientific Industrial Chairman Jeffrey Chen (陳昌益) said Asteelflash will help his company build a broader production network as the firm eyes value-added automotive, medical care and industrial applications.

At present, Universal Scientific Industrial has factories in Taiwan, Mexico and Huizhou in China's Guangdong Province. It has also acquired a plant in Poland and has set up a joint venture in Brazil with U.S.-based integrated circuit designer Qualcomm Inc.

With a workforce of 18,000 worldwide, Universal Scientific Industrial posted 33.50 billion Chinese yuan (US$4.80 billion) in consolidated sales in the first 11 months of this year, up 12.61 percent from a year earlier.