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China approves MediaTek, MStar merger

Posted: 30 Aug 2013     Print Version  Bookmark and Share

Keywords:China  MediaTek  MStar  merger 

China's Ministry of Commerce approved the Rs.23,952.10 crore ($4 billion) merger between Taiwanese chip designers MediaTek Inc. and MStar with conditions covering the sale of LCD TV chips.

MediaTek acquired a 48 per cent stake in MStar in August 2012 but since then has been battling to gain approval from authorities in Taiwan, South Korea, and China for a total merger and has postponed the closing deadline for the deal multiple times.

MediaTek and MStar are public companies that design and sell SoCs that go in smartphones and other consumer and multimedia electronics. MediaTek is particularly strong in chips for smartphones.

The Chinese authorities were the last regional authority to rule on the proposed merger. The Ministry of Commerce has posted its findings on its website, including the requirement that MediaTek and MStar continue to compete in digital TV controller chips for three years after the merger completes.

MStar must delist from the Taiwan Stock Exchange and become a subsidiary company of MediaTek but continue to operate separately for three years; and MediaTek must then reapply to have that condition lifted. However, MStar's handset and wireless business units are expected to be incorporated within MediaTek.

MediaTek has still to submit a detailed plan to the Ministry of Communications on how it will effect the merger, and the closing date for the deal has now been postponed three months to Feb. 1, 2014.





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