A Case Study Of Willsemi's Merger And Acquisition Of Beijing Omni Vision And SuperPix

As an important part of information technology industry,the semiconductor industry not only plays a vital role in national economic development,but also is closely related to national strategic security.Since the outbreak of trade disputes between China and the United States,many significant companies related to information technology or semiconductor at home and abroad,such as ZTE,Huawei and SMIC have experienced a severe trade blockade successively,and the semiconductor industry is unprecedentedly concerned by personages of all circles in China.The most cutting-edge core technologies in the semiconductor industry are mastered by international giants,so the domestic semiconductor manufacturers are highly dependent on foreign key elements,such as chip technology,manufacturing equipment and raw materials with insufficient industry discourse power.The semiconductor industry in China was started late,which resulted in a large gap with that of developed countries.In this sense,the completely independent research and development may be time-consuming,and to obtain core technologies through merge and acquisition would be a favorable method.The foreign and domestic scholars have conducted a large number of researches on merger and acquisition,but with few about merger and acquisition in the semiconductor industry.In recent years,the explosively increasing mergers and acquisitions in the semiconductor industry have provide rich materials for M&A cases.Thus,this thesis took the classical vertical M&A case of Willsemi's merger with Beijing Omni Vision and Super Pix in semiconductor industry as the research object,carried out researches from four aspects,including motivation of M&A,valuation of target company,market performance and financial performance of the acquiring company after M&A,and evaluated the effect of M&A so as to find out related successful experience and provide certain reference to further M&A activities in the semiconductor industry.This thesis firstly conducted comprehensive analysis on information obtained from multiple channels to explore the motivation of M&A of the acquiring company,then analyzed whether the transaction consideration was rational based on valuation studies on being acquired companies Beijing Omni Vision and Super Pix via the income approach,later evaluated the short-term market performance after M&A via the event study method,and finally studied the four-year data growth trend before and after M&A from four indexes including the operation capacity,profitability,debt paying ability and growth ability,and conducted horizontal comparison among 15 domestic chip design companies in regard to mean of indexes.This thesis concluded five motivations of M&A of Willsemi as follows: 1)pursue synergy;2)find out new profitable growth;3)high-quality assets of the target company;4)to be promoted by shareholders of the target company;5)strategic layout of full-line products;the price of the target company was rational based on the valuation analysis;the market performance analysis indicated that the market income of this merger was negative in the short term and positive in the long term.The financial index analysis showed that the profitability,debt paying ability and development ability of Willsemi had been significantly improved,while the operational ability was slightly weakened.This case study proved the vertical M&A in the semiconductor industry can obtain significant synergies,particularly the vertical M&A in the industry chain,and help companies to expand the industry chain and improve upstream and downstream control.