Wingtech Co., Ltd. (hereinafter referred to as "Wingtech") purchased Nexperia Holding B.V. (hereinafter referred to as "Nexperia") through the purchase of assets using funds gained from the issuance of shares, matching funds as well as cash payments. This transaction, which effectively gave Wingtech control over the Nexperia Group (hereinafter referred to as "the transaction") was completed in October 2019 following China Securities Regulatory Commission’s (“CSRC”) approval to the Ministry of Finance to deliver the purchased assets in China and the completion of the non-public offering of stocks and other efforts to raise supporting funds for the purchase. The transaction not only represents the largest merger and acquisition (“M&A”) transaction completed in the A-share market of the year but also the highest amount for an M&A actually raised by a non-state-owned listed company of that year.
Nexperia Group was founded after the transfer of the Standard Products Division of semiconductor giant NXP Semiconductors (“NXP”) to Chinese investors through 12 domestic funds and one overseas fund in 2017. Currently, it is the world's leading supplier of semiconductor standard devices, supplying more than 10,000 types of products to over 25,000 customers and employing more than 11, 000 across Asia, Europe and the United States. As the former Standard Products business unit of NXP, they have more than 60 years of professional experience in the semiconductor industry and are the expert in the production of discrete and MOSFET components as well as analog & logic ICs. Their design, manufacture and package testing of these products are regarded as one of the top three in the world, with their products being widely used in the automobile, communication, industrial control, computer, and consumer electronics industries among others.
In April 2018, domestic investors indirectly holding the largest investment shares of Nexperia Group publicly transferred their shares through a listed bidding. After winning the bid, Wingtech finalized the transaction through negotiation with domestic funds and the General Partners (“GP”) and Limited Partners (“LP”) of the overseas funds.
The complexity of the transaction can be seen in the following aspects:
(1) The amount involved: The value of the transaction was RMB 33.8 billion while the shares and cash paid involved nearly RMB 20 billion. The transaction not only represents the largest M&A transaction completed in the A-share market of the year but also the highest amount for an M&A actually raised by a non-state-owned listed company of that year.
(2) The complexity of the reorganization plan: the transaction involved two major asset restructuring. As these were both major cash purchase procedures, they were both subject to the approval of the CSRC. Moreover, it involved other complex transactions such as the issuance of shares in the later period and the raising of supporting funds for the purchase.
(3) The number of parties involved: There were 9 trading partners involved in the transaction, 10 counterparties to the cash paid, and 1 party to the transaction with equal shares or cash for consideration. The clauses of the agreements between the parties were all decided through commercial negotiation.
(4) The complexity of procedures for overseas due diligence, examination, and approval: The transaction involved the legal opinions of 11 overseas lawyers, the anti-monopoly examination and approval of 6 countries, as well as the examination and approval of overseas investment of 1 country and 1 region.
JunHe was appointed as the legal counsel for Wingtech to carry out work including drafting of pre-preparation bidding documents; preparation of design and bidding plans; negotiation with equity investors GP, LP, and banks; demonstration of group reorganization plans; assisting with communication and negotiation with overseas entities for examination, approval and declaration procedures; coordination of legal opinions issued overseas by overseas lawyers; and the issuance of major asset restructuring. In addition to JunHe’s adept legal skills, their comprehensive tender scheme, investment plan, and reorganization plan, as well as the project team’s diligent work style was highly appraised by clients and other intermediaries.