Yageo on June 30 announced that it will wholly own inductor maker Chilisin Electronics, an existing member of the Yageo Group, through acquiring all outstanding common shares of Chilisin via stock swap at an exchange of one Chilisin share for 0.2002 Yageo share.
The new Yageo shares to be issued for the stock swap is estimated to take up 8.8% of Yageo's increased paid-in capital, Yageo said. The stock exchange rate is subject to adjustment and the transaction is expected to close on December 30, 2021, Yageo noted.
The acquisition is intended to extend Yageo's main product lines from chip resistors, tantalum capacitors, and MLCCs currently to inductors as well as help Chilisin enter high-end markets in the US, Europe and Japan through Yageo's global channels, Yageo chairman and CEO Pierre Chen indicated.
Currently, Chilisin has about 89% of consolidated revenues coming from the Greater China market characterized by intensive price competition, and 80% of its products are of general models and only 15-20% for niche-market applications.
Before acquisition of US-based fellow makers Pulse Electronics and Kemet, Yageo had 65% of consolidated revenues coming from the Greater China market and 35% from other overseas markets, and 70% of its products belonged to general models while 30% were for niche-market applications, Chen said.
However, Yageo has adjusted its operation in a bid to hike gross margins and profitability since 2018, Chen noted. As a result, the proportion of products for niche-market applications has risen to 75% currently and Yageo's operation has become little affected by fluctuations in market conditions, Chen indicated.
