French-backed chip giant surrounds Newport Wafer Fab as bidding war looms

Nexperia is suing the government's demand to sell the Newport facility. Credit: Matthew Horwood/Getty Images

Microchip Giant, backed by France and Italy, is part of a group of companies running Britain's largest semiconductor plant after ministers ordered its Chinese owners to sell the plant.

Assumed that STMicroelectronics, a Dutch semiconductor company partially owned by the French and Italian governments, and GlobalFoundries, of which the Abu Dhabi sovereign wealth fund is the largest shareholder, have expressed potential interest in Newport Wafer Fab. They are among the top 10 potential bidders.

Nexperia, which acquired the facility in 2021, is believed to have opened the books to interested parties despite pushing to litigate the government's demand for the sale. the facility.

Former business secretary Grant Schapps ordered Dutch-headquartered Nexperia, owned by Chinese technology company Wingtech, to sell the facility last year on national security grounds.

The bidding is likely to be complicated by exclusivity arrangements made by former owner Drew Nelson, who also wants to buy the plant.

Mr Nelson has been working on a buyout offer for the plant with London-based investment firm Palladian, which will be presented in as an alternative to UK-led overseas buyers who will focus on high-tech composite semiconductors. It is assumed that private equity groups have also shown interest.

Then-business secretary Grant Shapps ordered Nexperia to sell the facility last year. Photo: Leon Neal/Getty Images.

Nexperia is trying to cancel the order to sell the plant, and a court hearing is scheduled for the fall.

Government officials are believed to have previously discussed providing support to taxpayers for buyouts. The National Security Strategic Investment Fund, a body linked to GCHQ and run by British Business Bank, has been discussed as one potential source of capital, although it is not clear if it is still being discussed.

Nexperia was hired. Atreg, a consulting firm specializing in the sale of semiconductor manufacturing plants, in April.

The company confirmed that it was in talks with potential buyers.

A spokesman said: “While we are waiting for the outcome of the litigation review, Nexperia has appointed consultants to explore a potential future sale of its Newport manufacturing site.”

“As part of this process, Atreg is privately briefing a number of potentially interested parties. Our priorities remain the same – to care for the affected Nexperia Newport employees and to provide supplies for our customers. This appointment was made with those priorities in mind.

“Nexperia remains fully committed to the judicial review process and continues to strongly disagree with the UK government's divestment order of November 2022, accepting none of the national security concerns expressed.”

Believed that the company has opened a “data room” that gives potential bidders access to a detailed view of its finances and assets.

One industry source said US-listed STMicro and GlobalFoundries would be considered natural potential bidders trades with deep pockets. and industry connections to make it a commercial success. Another suggested that the companies were more focused on the EU and the US, where large subsidies are available.

The companies did not respond to requests for comment.

The states of France and Italy are STMicro's largest shareholders, each owns 13.8% of the shares.

Nexperia said the plant could be forced to close if the company is forced to sell it. Nexperia acquired Newport Wafer Fab 86% for around £63m in 2021 after the business ran into financial difficulties.