[Global Technology Comprehensive Report] The Nikkei Shimbun reported on February 25 that on the 24th, China Unigroup issued an announcement to give up its investment in the US Western Digital Data (WD). The reason is that US authorities are involved in the review. This is another

[Global Technology Comprehensive Report] The Nikkei Shimbun reported on February 25 that on the 24th, China Unigroup issued an announcement to give up its investment in the US Western Digital Data (WD). The reason is that US authorities are involved in the review. This is another failure of Chinese-funded enterprise mergers and acquisitions due to US authorities' review. Unigroup reached an agreement with Western Digital in September 2015, investing US$3.8 billion to acquire a 15% stake in Western Digital. However, Unigroup said on the 23rd that it received a notice from the US Foreign Investment Commission (CFIUS) to intervene in the investigation.

Western Data has participated in the construction of the information system of the US government and enterprises, and may be denied by the US authorities in fact to participate in the operation. In the contract between Tseng and Western Digital, it agreed that if the US Foreign Investment Commission intervened in the investigation, the contract could be terminated, so Tseng decided to suspend its investment.

The cooperative relationship between Unigroup and Western Digital will continue. If the joint venture between the two parties in China is approved by the government, it will start operations in the second half of 2016. Western Digital originally planned to acquire US storage equipment manufacturer SanDisk based on Unigroup's investment, but this plan will not change.

The Chinese government is promoting corporate globalization, and Chinese-funded enterprises are constantly launching mergers and acquisitions against American companies. However, the U.S. government has been vigilant about the possibility of a security threat to Chinese funds. Unigroup also issued an acquisition offer to Micron Technology in the United States in the summer of 2015. But afterwards, Zhao Weiguo, chairman of Unigroup, said that he had not received a response and the negotiations did not seem to have made any progress.

Fairchild Semiconductor, a veteran American semiconductor manufacturer looking for buyers, originally selected China Resources Group and other companies as priority buyers. After entering February, it announced that it would give priority to the US ON Semiconductor. It is believed to be concerned about government review.

Tianguang is also launching an acquisition offensive in Taiwan. From October to December 2015, Unigroup announced that it would contribute capital to three large semiconductor packaging and testing factories including Licheng Technology. The investment ratios are about 25%, and the total investment amount reaches NT$88.2 billion. However, in Taiwan's Democratic Progressive Party will come to power in May, and it is very alert to the main semiconductor industry that will be swallowed up by mainland capital. It may take some time for Unigroup to be approved for its capital.

Editor: Wang Huan