The US blocks Magnachip's sale to China-based Wise Road Capital, citing security risks

Earlier this year, OLED driver IC developer MagnaChip announced that it is being acquired by China-based Wise Road Capital, for $1.4 billion. We reported that the Committee on Foreign Investment in the United States (CFIUS) is looking into blocking this deal, and now the CFIUS made its final decision.

Magnachip drivers and chips photo

The CFIUS stated that "It has confirmed the national security risks that may arise in the United States from the acquisition of MagnaChip by the Chinese private equity fund". This pretty much cancels the potential acquisition.

It is reported that Magnachip received an alternative offer from British private equity fund company Cornucopia, an that they company is now accepted to look into that offer - which is actually higher than the Wise Road Capital deal, at $1.66 billion.

Earlier this month MagnaChip reported its financial results for Q2 2021, with display revenues "negatively impacted by severe supply constraints that continued to deepen in the second quarter".

Posted: Sep 02,2021 by Ron Mertens