CFIUS Filing Clearance: Beijing JianGuang Asset Management, Wise Road Capital and Nexperia Holdco Netherlands
Status: Clearance
Acquirer: Beijing JianGuang Asset Management Co., Ltd. (China); Wise Road Capital LTD (China based or affiliated – see text below)
Aquired: Nexperia Holdco Netherlands B.V. (Netherlands)
Value: US$2.75 Billion
Industry: Semiconductors
On February 6, 2017 NXP Semiconductors N.V., a global semiconductor company based in the Netherlands, closed its US$2.75 billion divestment of its Standard Products business, Nexperia Holdco Netherlands B.V., that has technology that is able to produce consistently reliable semiconductor components at a high volume, to a consortium of Chinese based investors. (See NXP Semiconductors Press Release, NXP Announces Completion of Standard Products Business Divestiture, Feb. 7, 2017.) NXP Semiconductors reported that, on Oct. 17, 2016, “the Committee on Foreign Investment in the United States (CFIUS) has approved the transaction under which NXP divests its Standard Products business (“Nexperia”) to a consortium of financial investors consisting of Beijing Jianguang Asset Management Co., Ltd (“JAC Capital”) and Wise Road Capital LTD (“Wise Road Capital”).” (See Nexperia Press Release, NXP Receives CFIUS Approval for Divestiture of Standard Products Business, Oct. 17, 2016.)
This closing follows from a June 14, 2016 agreement between, Nexperia Holdco Netherlands, Beijing JianGuang Asset Management Co., Ltd., a Chinese based technology focused investment company, and Wise Road Capital LTD, a “global private equity” fund focused on the technology sector. (See NXP Semiconductors Form 20-F, Mar. 3, 2017, SEC Filing; NXP Semiconductors Press Release, NXP Announces Completion of Standard Products Business Divestiture, Feb. 7, 2017.) Beijing JianGuang Asset Management Co., Ltd., is a subsidiary of JIC Capital, which is part of the China Jianyin Investment Ltd., a company approved by the State Council of China in 2004 with a “mission to promote technical progress and industrial upgrades.” (See Introduction of Shareholders, China Jianyin Investment webpage, visited Mar. 5, 2017; NXP Semiconductors Press Release, NXP Announces Completion of Standard Products Business Divestiture, Feb. 7, 2017.) Wise Road Capital LTD does not list an address on its webpage, but its management indicates that it is Chinese based or affiliated. (See About Us, Wise Road Capital webpage, visited Mar. 5, 2017.) For example, the Managing Partner of Wise Road Capital, Michael Yuanjie Zhang, was previously the Managing Director of China Investment Corporation, a sovereign wealth fund of China. (See id.)
According to Section 4.5 of the Sale and Purchase Agreement, the parties were required to file a joint CFIUS notice “as soon as practicable” and Section 4.1(d) states that CFIUS Clearance is a condition of closing. (Sale and Purchase Agreement, EX-10.33, Mar 3, 2017, SEC Filing.) Further, the Sale and Purchase Agreement grants the parties “a reasonable period of time to engage in discussions and negotiations with CFIUS and between themselves on the nature and scope of [mitigation] measures,” such that the parties can “ensure that any Mitigation Measures agreed upon are the narrowest possible measures with the least possible impact on the Business and the U.S. Business, so long as CFIUS Approval remains obtainable . . .” (Id. at Section 4.5.8.)
