SINGAPORE (Nov 6): Jiangsu Changjiang Electronics Technology (JCET) has confirmed the company made a non-binding proposal on Nov 5 to STATS ChipPAC to acquire all the issued and paid-up ordinary shares in STATS for an aggregate purchase price of US$780 million ($1 billion).

In a filing with the Singapore Exchange by STATS ChipPAC on JCET's behalf, JCET says STATS and its controlling shareholder Singapore Technologies Semiconductors Pte Ltd have agreed to negotiate, on an exclusive basis with itself, the definitive terms of the proposed transaction.

If the proposed transaction proceeds, JCET says it will be implemented by way of a pre-conditional voluntary conditional cash offer for STATS ChipPAC.

The exclusivity period will expire the company’s written confirmation to STATS of the termination of the negotiations in respect of the proposed transaction or 5 p.m. Singapore time on Nov 30, whichever has been mutually agreed upon.

JCET says the proposed transaction does not include STATS’s subsidiaries in Taiwan, being 52%-owned STATS ChipPAC Taiwan Semiconductor Corporation and 100%-owned STATS ChipPAC Taiwan Co.

However, JCET understands that STATS’s shareholdings in the Taiwanese companies will be restructured to enable STATS’s existing shareholders to maintain their effective ownership interests in the Taiwan companies before the completion of the proposed transaction.

Besides requiring approval from shareholders of JCET and possibly STATS, regulatory approvals from Mainland Chinese and Taiwanese regulators also have to be sought, JCET adds.

STATS ChipPAC is up 9.4% at 58 cents as at 4:30 p.m. local time.