Siliconware
Precision Industries Co., Ltd.
(Translation of Registrant’s name
into English)
Republic of China
|
3674
|
Not Applicable
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
(Primary Standard Industrial
Classification Code Number)
|
(I.R.S. Employer
Identification Number)
|
|
|
|
|
No. 123, Sec. 3, Da Fong Road
Tantzu, Taichung, Taiwan
Republic of China
|
|
|
|
|
(Address, including zip code, and telephone number, including area code, or registrant’s principal executive offices)
|
|
|
Law Debenture Corporate Services
Inc.
801 2nd Avenue, Suite 403
New York, NY 10017
1 (646) 747-1265
|
|
(Name, address, including Zip code, and telephone number, including area code, of agent for service)
|
|
George R. Bason, Jr., Esq. James
C. Lin, Esq.
Davis Polk & Wardwell LLP
c/o 18th Floor, The Hong Kong Club Building
3A Chater Road
Hong Kong
|
Chris K.H. Lin
Simpson Thacher & Bartlett
ICBC Tower, 35th Floor
3 Garden Road, Central
Hong Kong
|
____________________
Approximate
date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement becomes effective
and the consummation of the share exchange described herein.
____________________
If this Form
is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following
box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
☐
If this Form
is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration statement for the same offering.
☐
If applicable,
place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:
Exchange Act
Rule 13e-4(i) (Cross-Border Issuer Tender Offer)
☐
Exchange Act
Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) ☐
____________________
CALCULATION
OF REGISTRATION FEE
|
Title
of Each Class of
Securities to be Registered
|
Amount
To Be
Registered
|
Proposed
Maximum Offering Price per Share
|
Proposed
Maximum Aggregate Offering Price
|
Amount
of
Registration Fee
|
Common Shares
of ASE Industrial Holding Co., Ltd., par value NT$10 per share (1)
|
829,328,460(2)
|
Not
Applicable
|
$2,092,659,255(2)(3)
|
$261,739.87(4)
|
|
(1)
|
American depositary shares issuable upon deposit of the shares
registered hereby have been registered under a separate registration statement on Form
F-6 (Registration No. 333-214753). Each American depositary share will represent 2 common
shares of ASE Industrial Holding Co., Ltd.
|
|
(2)
|
Based upon the estimated number of common shares of ASE Industrial
Holding Co., Ltd. that may be issued to U.S. holders of the common shares of ASE in connection
with the share exchange described herein, using the share exchange ratios described herein.
This estimate is based upon (a) the actual number of shares of the common shares represented
by outstanding American depositary shares of ASE as of August 15, 2017, and (b) the estimated
number of shares of common shares of Advanced Semiconductor Engineering, Inc. (excluding
shares represented by American depositary shares but including the number of shares of
ASE Industrial Holding Co., Ltd. that may be sold in the Taiwanese market in respect
of the fractional shares that otherwise would be received by U.S. holders of ASE’s
common shares in the share exchange) as of August 15, 2017, the most recent date for
which information with respect to U.S. resident holders can be determined. The securities
to be issued in connection with the transaction outside of the United States are not
registered under this registration statement.
|
|
(3)
|
Pursuant to Rule 457(f) under the Securities Act of 1933, the
filing fee was calculated based on the market value of the securities of ASE to be exchanged
in the share exchange described herein for securities of ASE Industrial Holding Co.,
Ltd., calculated pursuant to Rule 457(c) by taking the average of the high and low prices
per share of ASE’s common shares as reported on the Taiwan Stock Exchange as of
December 8, 2017 (converted into U.S. dollars based on NT$30.02 = US$1.00, which is the
exchange rate set forth in the H.10 statistical release of the Federal Reserve Board
as in effect on December 8, 2017, the latest available exchange rate set forth in the
H.10 statistical release of the Federal Reserve Board) multiplied by 1,658,656,920, which
is the total number of shares of ASE’s common shares held of record by U.S. holders
on August 15, 2017, the most recent date for which information with respect to ASE’s
U.S. record holders can be determined, and multiplying the result by 0.0001245.
|
|
(4)
|
ASE previously paid a registration fee of US$222,019.64 in connection with the initial filing of the registration statement
on Form F-4 (No. 333-214752) previously filed on November 22, 2016.
|
The Registrant
hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such
date as the Commission, acting pursuant to said Section 8(a), may determine.
The information in this proxy statement/prospectus is subject to completion and amendment. A registration statement relating to the securities described in this proxy statement/prospectus has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy these securities be accepted prior to the time the registration statement becomes effective. This proxy statement/prospectus shall not constitute an offer to sell or the solicitation of any offer to buy nor shall there be any sale of these securities in any jurisdiction, in which such offer, solicitation or sale would be unlawful prior to registration under the securities laws of any such jurisdiction.
|
PRELIMINARY—SUBJECT
TO COMPLETION, DATED
DECEMBER 14, 2017
PROXY STATEMENT/PROSPECTUS FOR THE
PROPOSED SHARE EXCHANGE
—YOUR VOTE IS IMPORTANT
Dear ASE Shareholders:
We are pleased to report that Advanced
Semiconductor Engineering, Inc. (“ASE”) and Siliconware Precision Industries Co., Ltd. (“SPIL”) have entered
into a joint share exchange agreement on June 30, 2016 and as supplemented by a supplemental agreement dated December 14, 2017
(the “Joint Share Exchange Agreement”) pursuant to which a holding company, ASE Industrial Holding Co., Ltd. (“HoldCo”),
will be formed by means of a statutory share exchange pursuant to the laws of the Republic of China, and HoldCo will (i) acquire
all issued shares of ASE in exchange for shares of HoldCo using the share exchange ratio as described below, and (ii) acquire
all issued shares of SPIL using the cash consideration as described below (the “Share Exchange”). Upon the consummation
of the Share Exchange, ASE and SPIL will become wholly owned subsidiaries of HoldCo concurrently. Subject to the Share Exchange,
the Joint Share Exchange Agreement and the other transactions contemplated thereby being approved by shareholders of ASE and SPIL,
and upon the satisfaction of the other conditions for completing the Share Exchange, HoldCo will be formed — and the Share
Exchange is expected to become effective — on or around [DATE], 2018.
Pursuant to the terms and subject to the
conditions set forth in the Joint Share Exchange Agreement, at the effective time of the Share Exchange (the “Effective Time”):
|
(i)
|
for SPIL shareholders:
|
|
·
|
each SPIL
common share, par value NT$10 per share (“SPIL Common Share”), issued immediately
prior to the Effective Time (including SPIL’s treasury shares and the SPIL Common
Shares beneficially owned by ASE), will be transferred to HoldCo in consideration for
the right to receive NT$51.2 (representing NT$55,
minus
a cash dividend and a
return of capital reserve of NT$3.8 per SPIL Common Share distributed by SPIL on July
1, 2016), payable in cash in NT dollars, without interest
and net of any applicable withholding taxes (“SPIL Common Shares Cash Consideration”);
and
|
|
·
|
each SPIL
American depositary share, currently representing five SPIL Common Shares (“SPIL
ADS”) will be cancelled in exchange for the right to receive through JPMorgan Chase
Bank, N.A., as depositary for the SPIL ADSs (“SPIL Depositary”), the US dollar
equivalent of NT$256 (representing five times of the SPIL Common Shares Cash Consideration)
minus
(i) all processing fees and expenses per SPIL ADS in relation to the conversion
from NT dollars into US dollars, and (ii) US$0.05 per SPIL ADS cancellation fees pursuant
to the terms of the deposit agreement dated January 6, 2015 by and among SPIL, SPIL Depositary
and the holders and beneficial owners from time to time of the SPIL ADSs issued thereunder, payable in cash in US dollars, without interest and net of any
|
applicable
withholding taxes (“SPIL ADS Cash Consideration,” together with the SPIL Common Shares Cash Consideration, “Cash
Consideration”).
|
(ii)
|
for ASE shareholders:
|
|
·
|
each
ASE common share (“ASE Common Share”), par value NT$10 per share, issued
immediately prior to the Effective Time (including ASE’s treasury shares), will be transferred to HoldCo in consideration
for the right to receive 0.5 HoldCo common shares (“HoldCo Common Shares”), par value NT$10 per share; and
|
|
·
|
each ASE American depositary share, currently representing five ASE Common Shares (“ASE ADSs”), will represent
the right to receive 1.25 HoldCo American depositary shares, each representing two HoldCo Common Shares (“HoldCo ADSs”)
upon surrender for cancellation to Citibank, N.A., as depositary for the ASE ADSs, after the Effective Time. The ratio at which
ASE Common Shares will be exchanged for HoldCo Common Shares and ASE ADSs will be exchanged for HoldCo ADSs is hereinafter referred
to as the “Exchange Ratio.”
|
Under Republic of China law, if any fractional
HoldCo Common Shares representing less than one common share would otherwise be allotted to former holders of ASE Common Shares
in connection with the Share Exchange, those fractional shares will not be issued to those shareholders. Pursuant to the Joint
Share Exchange Agreement, ASE will aggregate the fractional entitlements and sell the aggregated ASE Common Shares using the closing
price of ASE Common Shares on the Taiwan Stock Exchange (the “TWSE”) on the ninth (9
th
) ROC Trading Day
(as defined below) prior to the Effective Time, to an appointee of the Chairman of HoldCo. The cash proceeds from the sale will
be distributed to the former holders of ASE Common Shares by HoldCo on a proportionate basis in accordance with their respective
fractions at the Effective Time.
If you hold ASE ADSs, you will be able
to exchange those ASE ADSs for HoldCo ADSs by delivering your ASE ADSs to Citibank, N.A., as depositary, after the Effective Time.
Citibank, N.A., as depositary for the ASE ADSs, will only distribute whole HoldCo ADSs. Citibank, N.A., as depositary for the
ASE ADSs, will aggregate the fractional entitlements to HoldCo ADSs and will use commercially reasonable efforts to sell the aggregated
HoldCo ADS entitlements in the open market and will distribute the net cash proceeds to the holders of ASE ADSs entitled to them.
Subject to approval at the ASE EGM
(as defined below), HoldCo will issue 4,306,143,682 HoldCo Common Shares (based on 8,732,287,364 outstanding ASE Common Shares
as of November 30, 2017 and taking into account the cancellation of up to 120,000,000 ASE treasury shares which may be then-outstanding)
in connection with the Share Exchange.
ASE Common Shares are listed and traded
on the TWSE under the ticker “2311” and ASE ADSs are listed and traded on the New York Stock Exchange (“NYSE”)
under the ticker symbol “ASX.” On [DATE], 2017, the most recent practicable trading day prior to the printing of this
proxy statement/prospectus, the closing price per ASE Common Share on the TWSE was NT$[
·
]
(US$[
·
]), and the closing price per ASE ADS on the NYSE was US$[
·
].
SPIL Common Shares are listed and traded on the TWSE under the ticker “2325” and SPIL ADSs are listed and traded on
the NASDAQ National Market (“NASDAQ”) under the ticker symbol “SPIL.” On [DATE], 2017, the most recent
practicable trading day prior to the printing of this proxy statement/prospectus, the closing price per SPIL Common Share on the
TWSE was NT$[
·
] (US$[
·
]), and the
closing price per SPIL ADS on NASDAQ was US$[
·
]. Following completion of the Share
Exchange, ASE anticipates that the HoldCo Common Shares will trade on the TWSE and HoldCo ADSs will trade on the NYSE.
Before the Share Exchange can be completed,
ASE shareholders must vote to approve, among other things, the Share Exchange and the other transactions contemplated by the Joint
Share Exchange Agreement, and SPIL shareholders must vote to approve the acquisition by HoldCo of all issued shares of SPIL using
the Cash Consideration. If you are an ASE shareholder, ASE is sending you this proxy statement/prospectus to ask you to vote in
favor of these matters.
The extraordinary general shareholders’
meeting of ASE shareholders (the “ASE EGM”) is expected to be held on [DATE], 2018, at 10:00 A.M. (Taiwan time), at
Zhuang Jing Auditorium, 600 Jiachang Road, Nantze Export Processing Zone, Nantze District, Kaohsiung City, Taiwan, Republic of
China. At this ASE EGM, ASE
shareholders
will be asked to approve, among other things, the Share Exchange and the other transactions contemplated by the Joint Share Exchange
Agreement. More information about the proposals to be voted on at this ASE EGM is contained in this proxy statement/prospectus.
The board of directors of ASE has unanimously determined that (i) the Exchange Ratio constitutes fair value for each ASE Common
Share and each ASE ADS, and (ii) the Joint Share Exchange Agreement and the transactions contemplated thereby are advisable, fair
to and in the best interests of ASE and its shareholders. The board of directors of ASE recommends that ASE shareholders vote
“FOR” the approval of the Share Exchange and the other transactions contemplated by the Joint Share Exchange Agreement
and “FOR” the approval of the other proposals to be voted on at this ASE EGM as described in this proxy statement/prospectus.
To attend and vote at the ASE EGM under
Republic of China law, holders of ASE Common Shares must follow the procedures outlined in the convocation notice, which will be
sent to those holders by ASE. To give voting instructions to the depositary for the ASE ADSs, holders of ASE ADSs must follow the
procedures outlined in the notice of the ASE EGM that Citibank, N.A., as depositary for the ASE ADSs, will separately send to those
ASE ADS holders.
This proxy statement/prospectus is
an important document containing answers to frequently asked questions, a summary description of the transactions contemplated
by the Joint Share Exchange Agreement and more detailed information about ASE, SPIL, the Joint Share Exchange Agreement, the Share
Exchange and the other transactions contemplated by the Joint Share Exchange Agreement and the other matters to be voted upon
by ASE shareholders as part of the ASE EGM. We urge you to read this proxy statement/prospectus and the documents incorporated
by reference carefully and in their entirety.
In particular, you should consider the matters discussed in the section entitled
“Risk Factors” beginning on page 66.
Thank you for your cooperation and continued
support.
Sincerely,
Jason C.S. Chang
Chairman and Chief Executive Officer
Advanced Semiconductor Engineering, Inc.
Neither the Securities and Exchange
Commission nor any state securities commission has approved or disapproved of the Share Exchange or the securities to be issued
in connection therewith, or determined if this proxy statement/prospectus is accurate or complete. Any representation to the contrary
is a criminal offense.
As a shareholder (but not as an
ADS holder), you may have dissenters’ rights in connection with the transactions under the laws of the Republic of China.
See page 62 for a complete discussion of your dissenters’ rights, if any.
____________________
This document is dated [DATE], 2017
and is first being delivered to ASE shareholders on or about [DATE], 2018.
NOTICE OF EXTRAORDINARY GENERAL MEETING
To
Be Held On [DATE], 2018
Dear Shareholders:
This is a notice that Advanced Semiconductor
Engineering, Inc. (“ASE”) will hold an Extraordinary General Meeting (the “ASE EGM”) on [DATE], 2018,
at 10:00 A.M. (Taiwan time), and the location is expected to be at Zhuang Jing Auditorium, 600 Jiachang Road, Nantze Export Processing
Zone, Nantze District, Kaohsiung City, Taiwan, Republic of China.
At the ASE EGM, we will discuss, and ASE
shareholders will vote on, the following proposals:
In connection with Advanced
Semiconductor Engineering, Inc.:
|
·
|
Proposal
1. To consider and to vote upon the joint share exchange agreement entered into between
Advanced Semiconductor Engineering, Inc. and Siliconware Precision Industries Co., Ltd.
on June 30, 2016 and as supplemented by the supplemental agreement dated December 14,
2017 (the “Joint Share Exchange Agreement”) and the proposed share exchange
and the other transactions contemplated by the Joint Share Exchange Agreement
|
|
·
|
Proposal
2. To consider and to vote upon the amendment to the Procedures for Lending Funds
to Other Parties of Advanced Semiconductor Engineering, Inc.
|
|
·
|
Proposal
3. To consider and to vote upon the amendment to the Procedures of Making the Endorsement
and Guarantees of Advanced Semiconductor Engineering, Inc.
|
|
·
|
Proposal
4. To consider and to vote upon the amendment to the Procedures for Acquisition or
Disposal of Assets of Advanced Semiconductor Engineering, Inc.
|
In connection with ASE
Industrial Holding Co., Ltd.:
|
·
|
Proposal
1. To consider and to vote upon the adoption of the articles of incorporation of ASE
Industrial Holding Co., Ltd.
|
|
·
|
Proposal
2. To consider and to vote upon the Rules of Procedure for Shareholders' Meetings
of ASE Industrial Holding Co., Ltd.
|
|
·
|
Proposal
3. To consider and to vote upon the Rules Governing the Election of Directors and
Supervisors of ASE Industrial Holding Co., Ltd.
|
|
·
|
Proposal
4. To consider and to vote upon the Procedures for Lending Funds to Other Parties
of ASE Industrial Holdings Co. Ltd.
|
|
·
|
Proposal
5. To consider and to vote upon the Procedures of Making the Endorsement and Guarantees
of ASE Industrial Holding Co., Ltd.
|
|
·
|
Proposal 6. To consider and to vote upon the Procedures for Acquisition or Disposal of Assets of ASE Industrial Holding
Co., Ltd.
|
|
·
|
Proposal 7. To consider and elect the members of the board of directors and supervisors of ASE Industrial Holding
Co., Ltd.
|
|
·
|
Proposal 8. To consider and to vote upon the proposal to waive the non-competition clauses applicable to newly elected
directors of ASE Industrial Holding Co., Ltd.
|
This proxy statement/prospectus describes
certain proposals listed above in more detail. Please refer to the attached document, including the Joint Share Exchange Agreement
and all other annexes and including any documents incorporated by reference, for further information with respect to the business
to be transacted at the ASE EGM. You are encouraged to read the entire document carefully before voting.
In particular, see
the section entitled “Risk Factors.”
The record date for the determination
of shareholders entitled to vote at the ASE EGM will be [DATE], 2018 (Taiwan time) (the “ASE EGM Record Date”). Only
ASE shareholders who hold common shares of ASE, par value NT$10 per share (“ASE Common Shares”), of record on the
ASE EGM Record Date are entitled to vote at the ASE EGM, or to exercise the appraisal rights conferred on dissenting shareholders
by the laws of the Republic of China. Each ASE Common Share entitles its holder to one vote at the ASE EGM on each of Proposal
1 to Proposal 6, and Proposal 8. Proposal 7 will be voted on through cumulative voting. You may exercise voting rights by electronic
means or by attending the ASE EGM in person or by proxy using a duly authorized power of attorney in the prescribed form attached
to the notice of convocation distributed by ASE prior to the ASE EGM. You may exercise your voting right by electronic means beginning
from the fifteenth (15
th
) calendar day prior to the ASE EGM until the third calendar day prior to the day of the ASE
EGM. Shareholders who intend to exercise voting rights electronically must log in to the website maintained by the Taiwan Depository
& Clearing Corporation (“TDCC”) (https://www.stockvote.com.tw) and proceed in accordance with the instructions
provided therein.
If you own American depositary shares
of ASE (“ASE ADSs”), each representing five ASE Common Shares, Citibank, N.A. (“Citibank”), as depositary
for the ASE ADSs (the “ASE Depositary”), will send to holders of ASE ADSs as of [DATE], 2018 (New York time), a voting
instruction card and notice which outlines the procedures those holders must follow to give proper voting instructions to the
ASE Depositary. In accordance with and subject to the terms of the amended and restated deposit agreement, dated as of September
29, 2000 and as amended (as so amended, the “ASE Deposit Agreement”), by and among Citibank, as ASE Depositary, ASE,
and the holders and beneficial owners of ASE ADSs, holders of ASE ADSs have no individual voting rights with respect to the ASE
Common Shares represented by their ASE ADSs. Pursuant to the ASE Deposit Agreement, each holder of ASE ADSs is deemed to have
authorized and directed the ASE Depositary to appoint the Chairman of ASE or his/her designate (the Chairman or his/her designate,
the “Voting Representative”), as representative of the ASE Depositary, the custodian or the nominee who is registered
in the Republic of China as representative of the holders of ASE ADSs to vote the ASE Common Shares represented by ASE ADSs as
more fully described below.
In accordance with and subject to the
terms of the ASE Deposit Agreement, if holders of ASE ADSs together holding at least 51% of all the ASE ADSs outstanding as of
the record date set by the ASE Depositary for the ASE EGM instruct the ASE Depositary, prior to the ASE ADS voting instructions
deadline, to vote in the same manner with respect to any of the proposals to be voted on at the EGM, the ASE Depositary shall
notify the Voting Representative and appoint the Voting Representative as the representative of the ASE Depositary and the holders
of ASE ADSs to attend the ASE EGM and vote, as to such proposals, all ASE Common Shares represented by ASE ADSs outstanding in
the manner so instructed by such holders. If voting instructions are received from an ASE ADS holder by the ASE Depositary as
of the ASE ADS voting instructions deadline, which are signed but without further indication as to voting instructions, the ASE
Depositary shall deem such holder to have instructed a vote in favor of the items set forth in such instructions.
Furthermore, in accordance with and
subject to the terms of the ASE Deposit Agreement, if, for any reason, the ASE Depositary has not, prior to the ASE ADS voting
instructions deadline, received instructions from holders of ASE ADSs together holding at least 51% of all ASE ADSs outstanding
as of the record date set by the ASE Depositary for the ASE EGM, to vote in the same manner with respect to any of the proposals
to be voted on at the EGM, the holders of all ASE ADSs shall be deemed to have authorized and directed the ASE Depositary to give
a
discretionary
proxy to the Voting Representative, as the representative of the holders of ASE ADSs, to attend the ASE EGM and vote, as to such
proposals, all the ASE Common Shares represented by ASE ADSs then outstanding in his/her discretion; provided, however, that the
ASE Depositary will not give a discretionary proxy as described if it fails to receive under the terms of the ASE Deposit Agreement
a satisfactory opinion from ASE’s counsel prior to the ASE EGM. In such circumstances, the Voting Representative shall be
free to exercise the votes attaching to the ASE Common Shares represented by ASE in any manner he/she wishes, which may not be
in the best interests of the ASE ADS holders. The Voting Representative has informed ASE that he plans as of the date of this
proxy statement/prospectus to vote in favor of all of the proposals at the ASE EGM, although he has not entered into any agreement
obligating him to do so.
The board of directors of ASE has unanimously
determined that the Joint Share Exchange Agreement and the transactions contemplated thereby, including the proposed Share Exchange,
are advisable, fair to and in the best interests of ASE and its shareholders. The board of directors of ASE recommends that ASE
shareholders vote “FOR” each of the proposals set forth above.
YOUR VOTE IS VERY IMPORTANT REGARDLESS
OF THE NUMBER OF SHARES THAT YOU OWN
. The proposed Share Exchange cannot be completed without ASE shareholders approving, among
other things, the completion by ASE of the proposed Share Exchange and the other transactions contemplated by the Joint Share Exchange
Agreement by either (x) the approval of one-half of the shares present at the ASE EGM if at least two-thirds of ASE’s outstanding
shares attend the ASE EGM, or (y) the approval of two-thirds of the shares present at the ASE EGM if at least one-half of ASE’s
outstanding shares attend the ASE EGM.
ASE is not asking for a proxy and you
are not required to send a proxy to ASE. However, ASE Enterprises Limited, a shareholder of ASE has advised us that it intends
to solicit proxies in favor of the authorization and approval of the proposed Share Exchange and the other transactions contemplated
by the Joint Share Exchange Agreement.
If you have any questions concerning the
Joint Share Exchange Agreement or the transactions contemplated by the Joint Share Exchange Agreement, including the proposed
Share Exchange, or this proxy statement/prospectus, or would like additional copies or need help voting your ASE Common Shares,
please contact ASE Investor Relations Department at +886-2-6636-5678 or
ir@aseglobal.com
,
or Citibank Shareholder Services at 1-877-CITI-ADR (248-4237) for questions related to your ASE ADSs.
|
On behalf of the Board of Directors
|
|
|
|
/s/ Jason C.S. Chang
|
|
Jason C.S. Chang
Chairman of the Board of Directors
|
ADDITIONAL INFORMATION
This proxy statement/prospectus incorporates
important business and financial information about ASE and SPIL that is not included in or delivered with this proxy statement/prospectus.
This information is available to you without charge upon your written or oral request. You can obtain the documents incorporated
by reference into this proxy statement/prospectus free of charge by requesting them in writing or by telephone from ASE at the
following address and telephone number:
Advanced Semiconductor Engineering,
Inc.
e-mail:
ir@aseglobal.com
Tel: +886-2-6636-5678
Room 1901, No. 333, Section 1 Keelung Rd.
Taipei, Taiwan, 110
Republic of China
Attention: Investor Relations
|
If you would like to request any
documents, please do so by [DATE], 2018 in order to receive them before the ASE EGM.
For a more detailed description of the
information incorporated by reference into this proxy statement/prospectus and how you may obtain it, see the section entitled
“Where You Can Find More Information.”
ABOUT THIS PROXY STATEMENT/PROSPECTUS
This proxy statement/prospectus, which
forms part of a registration statement on Form F-4 filed by ASE and SPIL with the U.S. Securities and Exchange Commission (the
“SEC”), constitutes a prospectus of ASE and SPIL, respectively, under the Securities Act of 1933, as amended (the “Securities
Act”), with respect to the HoldCo Common Shares to be issued to ASE shareholders in connection with the Share Exchange. This
proxy statement/prospectus also constitutes a proxy statement for ASE under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). It also constitutes a notice of meeting with respect to the ASE EGM.
You should rely only on the information
contained in or incorporated by reference into this proxy statement/prospectus. No one has been authorized to provide you with
information that is different from that contained in, or incorporated by reference into, this proxy statement/prospectus. This
proxy statement/prospectus is dated [DATE], 2017, and you should assume that the information contained in this proxy statement/prospectus
is accurate only as of such date. You should also assume that the information incorporated by reference into this proxy statement/prospectus
is only accurate as of the date of such information.
This proxy statement/prospectus does
not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction
in which or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction. Information contained
in this proxy statement/prospectus regarding ASE has been provided by ASE and information contained in this proxy statement/prospectus
regarding SPIL has been provided by SPIL.
table
of contents
Definitions
As used in this proxy statement/prospectus,
the following defined terms have the following respective meanings:
|
·
|
“ASE” refers to Advanced Semiconductor Engineering, Inc. and, as the context requires, its subsidiaries;
|
|
·
|
“ASE ADS(s)” refers to the American depositary share(s) issued by the ASE Depositary under the ASE Deposit Agreement.
Each ASE ADS represents five ASE Common Shares;
|
|
·
|
“ASE Common Share(s)” refers to the common share(s) of ASE, par value NT$10 per share;
|
|
·
|
“ASE Depositary” or “Citibank” refers to Citibank, N.A., as depositary for the ASE ADSs under the ASE
Deposit Agreement;
|
|
·
|
“ASE Deposit Agreement” refers to the Amended and Restated Deposit Agreement, dated as of September 29, 2000, by
and among ASE, Citibank and the Holders and Beneficial Owners of ASE ADSs, as amended by Amendment No. 1 to Amended and Restated
Deposit Agreement, dated as of April 6, 2006, and by Amendment No. 2 to Amended and Restated Deposit Agreement, dated as of November
27, 2006;
|
|
·
|
“ASE Share(s)” refers to ASE Common Share(s) and ASE ADS(s), collectively;
|
|
·
|
“Effective Time” refers to the effective time of the Share Exchange;
|
|
·
|
“Exchange Act” refers to the U.S. Securities Exchange Act of 1934, as amended;
|
|
·
|
“FSC” refers to Financial Supervisory Commission of the ROC;
|
|
·
|
“HoldCo” refers to ASE Industrial Holding Co., Ltd., the holding company that will be formed at the Effective Time
as the parent company of ASE and SPIL as a result of the Share Exchange;
|
|
·
|
“HoldCo ADS(s)” refers to the American depositary share(s) that will be issued to ASE ADS holders upon the consummation
of the Share Exchange pursuant to a new American depositary receipt facility to be established by HoldCo with the HoldCo Depositary
upon the terms of the HoldCo Deposit Agreement. Each HoldCo ADS will represent two HoldCo Common Shares;
|
|
·
|
“HoldCo Common Share(s)” refers to the common share(s) of HoldCo, par value NT$10 per share, that will be issued
upon the consummation of the Share Exchange;
|
|
·
|
“HoldCo Depositary” refers to Citibank, N.A. in its capacity as depositary for the HoldCo ADSs pursuant to the
terms of the HoldCo Deposit Agreement;
|
|
·
|
“HoldCo Deposit Agreement” refers to the deposit agreement for the HoldCo ADSs to be entered into by HoldCo and
Citibank, N.A., as HoldCo Depositary, at the Effective Time, and to which the holders and beneficial owners of HoldCo ADSs become
parties upon acceptance of HoldCo ADSs;
|
|
·
|
“HoldCo Shares” refers to HoldCo Common Shares and HoldCo ADSs, collectively;
|
|
·
|
“IFRS” refers to International Financial Reporting Standards as issued by the International Accounting Standards
Board;
|
|
·
|
“Joint
Share Exchange Agreement” refers to the joint share exchange agreement dated June
30, 2016 and as supplemented by the Supplemental Agreement dated December 14, 2017, by
and between ASE and SPIL; an English translation of the Joint Share Exchange Agreement
is included as Annex A-1 and Annex A-2 to this proxy statement/prospectus;
|
|
·
|
“NASDAQ” refers to the NASDAQ National Market;
|
|
·
|
“non-ROC holder” refers to a non-resident individual or non-resident entity that owns ASE Common Shares or ADSs
or HoldCo Common Shares or HoldCo ADSs. As used in the preceding sentence, a “non-resident individual” is a non-ROC
national who owns ASE Common Shares or ADSs or HoldCo Common Shares or HoldCo ADSs and is not physically present in the ROC for
183 days or more during any calendar year, and a “non-resident entity” is a corporation or a non-corporate body that
owns ASE Common Shares or ASE ADSs or HoldCo Common Shares or HoldCo ADSs, is organized under the laws of a jurisdiction other
than the ROC and has no fixed place of business or business agent in the ROC;
|
|
·
|
“NT$” and “NT dollars” refers to New Taiwan dollars, the official currency of the ROC;
|
|
·
|
“NYSE” refers to the New York Stock Exchange;
|
|
·
|
“PRC” or “China” refers to the People’s Republic of China, excluding, for purposes of this proxy
statement/prospectus, Hong Kong, the Macau Special Administrative Region and Taiwan;
|
|
·
|
“Registrant” refers to either ASE or SPIL;
|
|
·
|
“ROC” or “Taiwan” refers to the Republic of China;
|
|
·
|
“ROC Company Law” refers to the Company Law of the ROC;
|
|
·
|
“ROC Mergers and Acquisitions Act” refers to the Business Mergers and Acquisitions Act of the ROC;
|
|
·
|
“ROC
Securities and Exchange Law” refers to the Securities and Exchange Act of the ROC;
|
|
·
|
“ROC Trading Day” refers to a day when TWSE is open for business;
|
|
·
|
“Share Exchange” refers to the transactions pursuant to which ASE will file an application with the TWSE and other
competent authorities to establish HoldCo by means of a statutory share exchange, HoldCo will acquire all issued shares of each
of ASE and SPIL and ASE and SPIL will become wholly owned subsidiaries of HoldCo concurrently;
|
|
·
|
“Securities Act” refers to the U.S. Securities Act of 1933, as amended;
|
|
·
|
“SEC” refers to the U.S. Securities and Exchange Commission;
|
|
·
|
“SPIL” refers to Siliconware Precision Industries Co., Ltd., and, as the context requires, its subsidiaries;
|
|
·
|
“SPIL ADS(s)” refers to the American depositary shares issued by the SPIL Depositary under the SPIL Deposit Agreement.
Each SPIL ADS represents five SPIL Common Shares;
|
|
·
|
“SPIL Common Share(s)” refers to the common share(s) of SPIL, par value NT$10 per share;
|
|
·
|
“SPIL Depositary” refers to JPMorgan Chase Bank, N.A., as depositary for the SPIL ADSs under the SPIL Deposit Agreement;
|
|
·
|
“SPIL Deposit Agreement” refers to the Amended and Restated Deposit Agreement, dated as of January 6, 2015, by
and among SPIL, JPMorgan Chase Bank, N.A., as SPIL Depositary, and the Holders and Beneficial Owners of SPIL ADSs, as amended;
|
|
·
|
“Supplemental
Agreement” refers to the supplemental agreement dated December 14, 2017 to the
joint share exchange agreement entered into between ASE and SPIL on June 30, 2016; an
English translation of the Supplemental Agreement is included as Annext A-2 to this proxy
statement/prospectus;
|
|
·
|
“TWSE” refers to the Taiwan Stock Exchange;
|
|
·
|
“U.S.” refers to the United States of America; and
|
|
·
|
“US$” and “U.S. dollars” refers to United States dollars, the official currency of the United States
of America.
|
For your convenience, this proxy statement/prospectus
contains translations of certain NT dollar amounts into U.S. dollar amounts at a rate of NT$30.33 to US$1.00, the exchange rate
set forth in the H.10 statistical release of the Federal Reserve Board on September 29, 2017, unless otherwise stated. We make
no representation that any NT dollar or U.S. dollar amounts could have been, or could be, converted into U.S. dollars or
NT dollars, as the case may be, at any particular rate, or at all.
Questions
and Answers about the Share Exchange
|
Q.
|
Why am I receiving this document?
|
|
A.
|
ASE and SPIL have entered into the Joint Share Exchange Agreement pursuant to which a holding company, HoldCo, will be established
by means of a statutory share exchange pursuant to the laws of the ROC, and HoldCo will (i) acquire all issued shares of ASE in
exchange for shares of HoldCo using the Exchange Ratio as described below, and (ii) acquire all issued SPIL Common Shares using
the Cash Consideration as described below. Upon the consummation of the Share Exchange, ASE and SPIL will become wholly owned subsidiaries
of HoldCo concurrently.
|
Before the Share Exchange can
be completed, ASE shareholders must vote to approve, among other things, the Share Exchange and the other transactions contemplated
by the Joint Share Exchange Agreement. If you are an ASE shareholder, ASE is sending you this proxy statement/prospectus to ask
you to vote in favor of these matters. ASE will hold the ASE EGM on [DATE], 2018 to obtain these approvals and the approval of
certain other proposals that are not conditions to the completion of the Share Exchange.
This proxy statement/prospectus,
which you should read carefully, contains important information about the Joint Share Exchange Agreement, the Share Exchange and
the other transactions contemplated by the Joint Share Exchange and other matters being considered at the ASE EGM. The enclosed
voting materials allow you to vote your shares without attending the applicable shareholders’ meeting. Your vote is very
important and we encourage you to submit your vote or proxy as soon as possible.
|
Q.
|
What will SPIL shareholders receive in the Share Exchange?
|
|
A.
|
As of the Effective Time of the Share Exchange:
|
|
·
|
each SPIL
Common Share, par value NT$10 per share, issued immediately prior to the Effective Time
(including SPIL’s treasury shares and the SPIL Common Shares beneficially owned
by ASE), will be transferred to HoldCo in consideration for the right to receive NT$51.2
(representing NT$55
minus
a cash dividend and a return of capital reserve of NT$3.8
per SPIL Common Share distributed by SPIL on July 1, 2016), payable
by HoldCo in cash in NT dollars, without interest and net of any applicable withholding
taxes; and
|
|
·
|
each
SPIL ADS will be cancelled in exchange for the right to receive through SPIL Depositary,
the US dollar equivalent of NT$256 (representing five times of the SPIL Common Shares
Cash Consideration)
minus
(i) all processing fees and expenses per SPIL ADS in
relation to the conversion from NT dollars into US dollars, and (ii) US$0.05 per SPIL
ADS cancellation fees pursuant to the terms of the SPIL Deposit Agreement, payable by HoldCo in cash in US dollars, without interest and net of any applicable
withholding taxes.
|
|
Q.
|
What will ASE shareholders receive in the Share Exchange?
|
|
A.
|
As of the Effective Time:
|
|
·
|
each
ASE Common Share, par value NT$10 per share, issued immediately prior to the Effective
Time (including ASE’s treasury shares), will be transferred to HoldCo in consideration for the right to receive 0.5 HoldCo
Common Shares; and
|
|
·
|
each ASE ADS, currently representing five ASE Common Shares, will, after the Effective Time, represent the right to receive
1.25 HoldCo ADSs, each HoldCo ADS representing two HoldCo Common Shares, upon surrender for cancellation to the ASE Depositary
after the Effective Time.
|
|
Q:
|
How will fractional entitlements to HoldCo Common Shares be handled in the Share Exchange?
|
|
A:
|
ASE will aggregate the fractional entitlements to HoldCo Common Shares and sell the aggregated HoldCo Common Shares using the
closing price of ASE Common Shares on the TWSE on the ninth (9
th
) ROC Trading Day prior to the Effective Time, to an
appointee of the Chairman of HoldCo. The cash proceeds from the sale will be distributed to the former holders of ASE Common Shares
by HoldCo on a proportionate basis in accordance with their respective fractions at the Effective Time.
|
|
Q:
|
How will fractional entitlements to HoldCo ADSs be handled in the Share Exchange?
|
|
A:
|
The ASE Depositary (Citibank) will aggregate the fractional entitlements to HoldCo ADSs, use commercially reasonable efforts
to sell the aggregated fractional entitlements to HoldCo ADSs on the open market, and remit the net cash proceeds (after deducting
applicable taxes, fees and expenses, including sales commissions) to the holders of ASE ADSs entitled to them.
|
|
Q.
|
How do the HoldCo Common Shares differ from ASE Common Shares?
|
|
A.
|
HoldCo Common Shares will not materially differ from ASE Common Shares from a legal perspective.
|
|
Q.
|
How do the HoldCo ADSs differ from ASE ADSs?
|
|
A.
|
HoldCo ADSs will not materially differ from ASE ADSs from a legal perspective.
|
|
Q.
|
When is the Share Exchange expected to be completed?
|
|
A.
|
The Share Exchange is expected to be completed on or promptly
after [DATE], 2018.
|
|
Q.
|
What is the record date for voting at the ASE EGM?
|
|
A.
|
The record date for voting at the ASE EGM for ASE Common Shares
is on [DATE], 2018 (Taiwan time).
|
|
Q.
|
How do I vote at the ASE EGM?
|
|
A.
|
You may exercise voting rights as a shareholder by electronic means or by attending the ASE EGM, as applicable, in person or
by proxy.
|
You may exercise your voting right
by electronic means beginning from the fifteenth (15
th
) calendar day prior to the ASE EGM, as applicable, until the
third calendar day prior to the day of the ASE EGM (the “Electronic Voting Period”). Shareholders who intend to exercise
voting rights electronically must login to the website maintained by the TDCC (
https://www.stockvote.com.tw
)
and proceed in accordance with the instructions provided therein.
You may exercise your voting rights
by attending the ASE EGM in person or by proxy using a duly authorized power of attorney in the prescribed form attached to the
notice of convocation distributed by ASE prior to the respective ASE EGM.
|
Q:
|
How will shares being represented at the ASE EGM by voting cards be treated?
|
|
A:
|
The voting cards used for the ASE EGM will describe the proposals to be voted on by shareholders at the ASE EGM, as applicable,
including approval of the Share Exchange. The voting cards will allow shareholders to indicate a ‘‘for’’
or ‘‘against’’ vote with respect to each proposal.
|
If you previously voted through
the electronic voting website, you may change or revoke your previous voting by logging in to the electronic voting website anytime
within the Electronic Voting Period. If you revoked your electronic voting within the Electronic Voting Period, you may attend
the ASE EGM, as applicable, and vote in person.
If you previously presented a valid
proxy or exercised your vote through the electronic voting website but then wish to attend the ASE EGM in person, you are required
to revoke your proxy in writing addressed to ASE or revoke your electronic vote by logging in to the electronic voting website
at least two (2) calendar days prior to the ASE EGM. Otherwise, the voting right exercised by your proxy or through the electronic
voting website will prevail.
|
Q:
|
How do I vote if I own ASE ADSs?
|
|
A:
|
The ASE Depositary will send to holders of ASE ADSs as of [DATE],
2018 close of business (New York time), a voting instruction card and notice, which outlines
the procedures those holders must follow to give proper voting instructions to the ASE
Depositary.
|
|
Q:
|
If I own ASE ADSs, what steps must I take to exchange my ASE ADSs for HoldCo ADSs?
|
|
A:
|
If you hold physical certificates, also known as ASE American depositary receipts (“ASE ADRs”), representing ASE
ADSs, you will be sent a letter of transmittal after the Effective Time by the ASE Depositary, which is to be used to surrender
your ASE ADSs to the ASE Depositary in exchange for HoldCo ADSs. The letter of transmittal will contain instructions explaining
the procedure for surrendering the ASE ADSs in exchange for the HoldCo ADSs. YOU SHOULD NOT RETURN ASE ADRs WITH THE ENCLOSED PROXY
CARD. The HoldCo ADSs will be issued in uncertificated, book-entry form, unless a physical HoldCo ADR is subsequently requested.
|
If you hold ASE ADSs in uncertificated
form registered directly on the books of the ASE Depositary, you will not be required to take any action after the Effective Time.
The ASE Depositary will, after the Effective Time, exchange your ASE ADSs for the applicable HoldCo ADSs and send you a statement
reflecting HoldCo ADSs issued in your name as a result of the Share Exchange and a check for the cash in lieu of any fractional
HoldCo ADS to which you are entitled as a result of the Share Exchange.
Beneficial holders of ASE ADSs held
in “street name” through a bank, broker or other financial institution with an account in The Depository Trust Company
(“DTC”) will not be required to take any action after the Effective Time to exchange ASE ADSs for HoldCo ADSs. After
the Effective Time, ASE ADSs held in “street name” will be exchanged by the ASE Depositary via DTC for the applicable
HoldCo ADSs and delivered in book-entry form via DTC to the applicable banks, brokers and other financial institutions for credit
to their clients, the beneficial owners of ASE ADSs.
|
Q:
|
If I own ASE ADSs, will I be required to pay any service fees to exchange my ASE ADSs for HoldCo ADSs?
|
|
A:
|
There is a US$0.02 cancellation fee per ASE ADS held payable by holders of ASE ADSs to the ASE Depositary in connection with
the exchange of ASE ADSs for HoldCo ADSs.
|
|
Q:
|
How will trading in ASE Common Shares and ASE ADSs be affected by the Share Exchange?
|
|
A:
|
ASE expects that ASE Common Shares will be suspended from trading on the TWSE starting from the eighth (8
th
) ROC
Trading Day prior to the Effective Time of the Share Exchange. ASE expects that HoldCo Common Shares will begin trading in Taiwan
during TWSE trading hours, at the Effective Time of the Share Exchange. ASE expects that the ASE ADSs will be suspended from trading
on the NYSE starting from the eighth (8
th
) trading day on the NYSE prior to the Effective Time of the Share Exchange.
ASE expects that HoldCo ADSs will begin trading on the NYSE during NYSE trading hours, at the Effective Time of the Share Exchange.
You will not be able to trade ASE Common Shares and ASE ADSs during these gaps in trading.
|
|
Q:
|
I am a holder of ASE’s US$200,000,000 aggregated
principal amount of currency-linked zero coupon convertible bonds due 2018 (the “ASE
2015 Convertible Bonds”). What will be the treatment of my bonds before and after
the Share Exchange?
|
|
A:
|
Prior to the maturity of the ASE 2015 Convertible Bonds,
you may exercise your rights pursuant to the indenture of the ASE 2015 Convertible Bonds.
ASE plans to fully repay the ASE 2015 Convertible Bonds on or before the maturity date
of such bonds, March 27, 2018. It is expected that on or after the Effective Time, the
ASE 2015 Convertible Bonds would no longer be outstanding.
|
|
Q:
|
I am a holder of SPIL’s zero coupon convertible
bonds due 2019 (the “SPIL Convertible Bonds”). What will be the treatment
of my bonds before and after the Share Exchange?
|
|
A:
|
Prior to the Effective Time, you may exercise your rights pursuant
to the indenture of the SPIL Convertible Bonds. If you chose to convert your SPIL Convertible
Bonds into SPIL Common Shares before the record date of the Share Exchange and become
a holder of SPIL Common Shares, your shares will be transferred to HoldCo in consideration
for the right to receive the Cash Consideration (subject to additional adjustments according
to the terms of the Joint Share Exchange Agreement and applicable laws) payable by HoldCo
in cash in NT dollars, without interest and net of any applicable withholding tax.
|
If
the SPIL Convertible Bonds have not been redeemed or repurchased by SPIL and cancelled or converted by you prior to the Effective
Time, HoldCo, will become a co-obligor with SPIL pursuant to a supplemental indenture to be entered into among SPIL, HoldCo and
the trustee of the SPIL Convertible Bonds and will pay Cash Consideration (subject to additional adjustments according to the
terms of the Joint Share Exchange Agreement and applicable laws) to such holders of SPIL Convertible Bonds for each SPIL Common
Share you are entitled to receive, without interest and net of any applicable withholding tax, if they exercise their conversion
rights after the Effective Time.
You are urged to consult your
own tax advisor as to the particular tax consequences of conversion of your SPIL Convertible Bonds, including the effect of any
federal, state, local, non-U.S. and other tax laws.
|
Q.
|
Whom can I call with questions?
|
|
A.
|
If you have more questions about the Share Exchange and the other transactions contemplated by the Joint Share Exchange Agreement,
you should contact:
|
Kenneth Hsiang
Email:
ir@aseglobal.com
Tel: +886-2-6636-5678
Room 1901, No. 333, Section 1 Keelung Rd.
Taipei, Taiwan, 110, Republic of China
Attention: Head of Investor Relations
|
Summary
The following summary highlights selected
information described in more detail elsewhere in this proxy statement/prospectus and the documents incorporated by reference into
this proxy statement/prospectus and may not contain all the information that may be important to you. To understand the Share Exchange
and the other transactions contemplated by the Joint Share Exchange Agreement and the matters being voted on by ASE shareholders
and SPIL shareholders at their respective extraordinary shareholders’ meeting more fully, and to obtain a more complete description
of the legal terms of the Joint Share Exchange Agreement, you should carefully read this entire document, including the annexes,
and the documents to which ASE and SPIL refer you. Each item in this summary includes a page reference directing you to a more
complete description of that topic. See the section entitled “Where You Can Find More Information.”
The Parties (see page 79)
Advanced Semiconductor Engineering, Inc.
ASE is a company limited by shares incorporated
under the laws of the ROC. ASE’s services include semiconductor packaging, production of interconnect materials, front-end
engineering testing, wafer probing and final testing services, as well as integrated solutions for electronics manufacturing services
in relation to computers, peripherals, communications, industrial, automotive, and storage and server applications.
ASE Common Shares are traded on the TWSE
under the ticker “2311” and ASE ADSs are traded on the NYSE under the symbol “ASX.” ASE’s principal
executive offices are located at 26 Chin Third Road, Nantze Export Processing Zone, Nantze, Kaohsiung, Taiwan, Republic of China,
and the telephone number at the above address is +886-7-361-7131.
Siliconware Precision Industries Co.,
Ltd.
SPIL is a company limited by shares incorporated
under the laws of the ROC. SPIL offers a full range of packaging and testing solutions, including advanced packages, substrate
packages and lead-frame packages, as well as testing for logic and mixed signal devices. SPIL currently targets customers in the
personal computer, communications, consumer integrated circuits and non-commodity memory semiconductor markets.
SPIL Common Shares are traded on TWSE under
the ticker “2325” and SPIL ADSs are traded on NASDAQ under the symbol “SPIL.” The principal executive offices
of SPIL are located at No. 123, Sec. 3, Da Fong Road, Tantzu, Taichung, Taiwan, Republic of China, and the telephone number is
+886-4-2534-1525.
ASE Industrial Holding Co., Ltd.
It is expected that HoldCo will be a company
limited by shares incorporated under the laws of the ROC and will be formed at the Effective Time. HoldCo will initially serve
exclusively as the holding company for ASE, SPIL, as well as their subsidiaries and investees. HoldCo will not have substantive
assets or operations.
It is expected that HoldCo Common Shares
will be traded on the TWSE and HoldCo ADSs will be traded on the NYSE. It is expected that HoldCo’s principal executive
offices will be located at 26 Chin Third Road, Nantze Export Processing Zone, Nantze, Kaohsiung, Taiwan, Republic of China and
their telephone number at the above address will be +886-7-361-7173.
The Share Exchange (see page 31)
ASE and SPIL have entered into the Joint
Share Exchange Agreement pursuant to which a holding company, HoldCo, will be formed by means of a statutory share exchange pursuant
to ROC law, and at the Effective Time, HoldCo will (i) acquire all issued shares of ASE in exchange for shares of HoldCo using
the Exchange Ratio as described below, and (ii) acquire all issued shares of SPIL using the Cash Consideration as described below.
Upon the consummation of the Share Exchange, ASE and SPIL will become wholly owned subsidiaries of HoldCo
concurrently.
Subject to the Share Exchange and the Joint Share Exchange Agreement being approved by shareholders of ASE and SPIL, respectively,
and upon the satisfaction of the other conditions for completing the Share Exchange, HoldCo will be formed — and the Share
Exchange is expected to become effective — on or around [DATE], 2018.
Pursuant to the terms and subject to the
conditions set forth in the Joint Share Exchange Agreement, at the Effective Time:
|
(i)
|
for SPIL shareholders:
|
|
·
|
each SPIL
Common Share, par value NT$10 per share, issued immediately prior to the Effective Time
(including SPIL’s treasury shares and the SPIL Common Shares beneficially owned
by ASE), will be transferred to HoldCo in consideration for the right to receive NT$51.2
(representing NT$55
minus
a cash dividend and a return of capital reserve of NT$3.8
per SPIL Common Share distributed by SPIL on July 1, 2016), payable
by HoldCo in cash in NT dollars, without interest and net of any applicable withholding
taxes; and
|
|
·
|
each
SPIL ADS will be cancelled in exchange for the right to receive through SPIL Depositary,
the US dollar equivalent of NT$256 (representing five times of the SPIL Common Shares
Cash Consideration)
minus
(i) all processing fees and expenses per SPIL ADS in
relation to the conversion from NT dollars into US dollars, and (ii) US$0.05 per SPIL
ADS cancellation fees pursuant to the terms of the SPIL Deposit Agreement, payable by HoldCo in cash in US dollars, without interest and net of any applicable
withholding taxes.
|
|
(ii)
|
for ASE shareholders:
|
|
·
|
each
ASE Common Share, par value NT$10 per share, issued immediately prior to the Effective
Time (including ASE’s treasury shares), will be transferred to HoldCo in consideration for the right to receive 0.5 HoldCo
Common Shares; and
|
|
·
|
each ASE ADS, currently representing five ASE Common Shares, will, after the Effective Time, represent the right to receive
1.25 HoldCo ADSs, each HoldCo ADS representing two HoldCo Common Shares, upon surrender for cancellation to the ASE Depositary
after the Effective Time.
|
Under ROC law, if any fractional HoldCo
Common Shares representing less than one common share would otherwise be allotted to former holders of ASE Common Shares in connection
with the Share Exchange, those fractional shares will not be issued to those shareholders. Pursuant to the Joint Share Exchange
Agreement, ASE will aggregate the fractional entitlements and sell the aggregated ASE Common Shares using the closing price of
ASE Common Shares on the TWSE on the ninth (9
th
) ROC Trading Day prior to the Effective Time, to an appointee of the
Chairman of HoldCo. The cash proceeds from the sale will be distributed to the former holders of ASE Common Shares by HoldCo on
a proportionate basis in accordance with their respective fractions at the Effective Time.
If you hold physical certificates, also
known as ASE American depositary receipts (“ASE ADRs”), representing ASE ADSs, you will be sent a letter of transmittal
after the Effective Time by the ASE Depositary, which is to be used to surrender your ASE ADSs to the ASE Depositary in exchange
for HoldCo ADSs. The letter of transmittal will contain instructions explaining the procedure for surrendering the ASE ADSs in
exchange for the HoldCo ADSs. YOU SHOULD NOT RETURN ASE ADRs WITH THE ENCLOSED PROXY CARD. The HoldCo ADSs will be issued in uncertificated,
book-entry form, unless a physical HoldCo ADR is subsequently requested.
If you hold ASE ADSs in uncertificated
form registered directly on the books of the ASE Depositary, you will not be required to take any action after the Effective Time.
The ASE Depositary will, after the Effective Time, exchange your ASE ADSs for the applicable HoldCo ADSs and send you a statement
reflecting HoldCo ADSs
issued
in your name as a result of the Share Exchange and a check for the cash in lieu of any fractional HoldCo ADS to which you are
entitled as a result of the Share Exchange.
Beneficial holders of ASE ADSs held in
“street name” through a bank, broker or other financial institution with an account in DTC will not be required to
take any action after the Effective Time to exchange ASE ADSs for HoldCo ADSs. After the Effective Time, ASE ADSs held in “street
name” will be exchanged by the ASE Depositary via DTC for the applicable HoldCo ADSs and delivered in book-entry form via
DTC to the applicable banks, brokers and other financial institutions for credit to their clients the beneficial owners of ASE
ADSs.
The ASE Depositary will only distribute
whole HoldCo ADSs. It will use commercially reasonable efforts to sell the fractional entitlements to HoldCo ADSs and distribute
the net cash proceeds to the holders of ASE ADSs entitled to it.
Subject to approval at the ASE EGM,
HoldCo will issue 4,306,143,682 HoldCo Common Shares (based on 8,732,287,364 outstanding ASE Common Shares as of November 30,
2017 and taking into account the cancellation of up to 120,000,000 ASE treasury shares which may be then-outstanding) in connection
with the Share Exchange.
The following chart depicts the organizational
structure of each of ASE and SPIL before the Share Exchange as of the date of this proxy statement/prospectus and immediately after
the Effective Time.
Before the Share Exchange as of the date
of this proxy statement/prospectus:
Immediately after the Effective Time:
The ASE EGM (see page 80)
Date, Time and Place
.
The ASE EGM to vote for the Share Exchange and the other transactions contemplated by the Joint Share Exchange Agreement is expected
to be held at 10:00 A.M. (Taiwan Time) on [DATE], 2018, at Zhuang Jing Auditorium, 600 Jiachang Road, Nantze Export Processing
Zone, Nantze District, Kaohsiung City, Taiwan, Republic of China.
Purpose
. The ASE EGM is being
held to consider and vote on:
In connection with ASE
|
·
|
Proposal
1. To consider and to vote upon the joint share exchange agreement entered into between
ASE and SPIL on June 30, 2016 and as supplemented by the Supplemental Agreement dated
December 14, 2017 (the “Joint Share Exchange Agreement”) and the proposed
share exchange and the other transactions contemplated by the Joint Share Exchange Agreement
|
|
·
|
Proposal
2. To consider and to vote upon the amendment to the Procedures for Lending Funds
to Other Parties of ASE
|
|
·
|
Proposal
3. To consider and to vote upon the amendment to the Procedures of Making the Endorsement
and Guarantees of ASE
|
|
·
|
Proposal
4. To consider and to vote upon the amendment to the Procedures for Acquisition or
Disposal of Assets of ASE
|
In connection with HoldCo
|
·
|
Proposal
1. To consider and to vote upon the adoption of the articles of incorporation of HoldCo
|
|
·
|
Proposal
2. To consider and to vote upon the Rules of Procedure for Shareholders' Meetings
of HoldCo
|
|
·
|
Proposal
3. To consider and to vote upon the Rules Governing the Election of Directors and
Supervisors of HoldCo
|
|
·
|
Proposal
4. To consider and to vote upon the Procedures for Lending Funds to Other Parties
of HoldCo
|
|
·
|
Proposal
5. To consider and to vote upon the Procedures of Making the Endorsement and Guarantees
of HoldCo
|
|
·
|
Proposal
6. To consider and to vote upon the Procedures for Acquisition or Disposal of Assets
of HoldCo
|
|
·
|
Proposal
7. To consider and elect the members of the board of directors and supervisors of
HoldCo
|
|
·
|
Proposal
8. To consider and to vote upon the proposal to waive the non-competition clauses
applicable to newly elected directors of HoldCo
|
Record Date; Voting Rights
.
Holders of ASE Common Shares will be entitled to exercise voting rights by electronic means or by attending the ASE EGM in person
or by proxy, if they are recorded on ASE’s stockholder register on [DATE], 2018 (“ASE EGM Record Date”). Only
ASE shareholders who hold ASE Common Shares of record on the ASE EGM Record Date are entitled to vote at the ASE EGM, or to exercise
the appraisal rights conferred on dissenting shareholders by the laws of the ROC. Each ASE Common Share entitles its holder to
one vote at the ASE EGM on each of Proposal 1 to Proposal 6, and Proposal 8. Proposal 7 will be voted on through cumulative voting.
You may exercise voting rights by electronic means or by attending the ASE EGM in person or by proxy using a duly authorized power
of attorney in the prescribed form attached to the notice of convocation distributed by ASE prior to the ASE EGM. You may exercise
your voting right by electronic means beginning from the 15
th
calendar day prior to the ASE EGM until the third calendar
day prior to the day of the ASE EGM. Shareholders who intend to exercise their voting rights electronically must log in to the
website maintained by the TDCC (https://www.stockvote.com.tw) and proceed in accordance with the instructions provided therein.
Holders of ASE ADSs will be entitled
to instruct the ASE Depositary (Citibank) as to how to vote the ASE Common Shares represented by ASE ADSs at the ASE EGM in accordance
with the procedures set forth in this prospectus, if those holders were recorded on the ASE Depositary’s register on [DATE],
2018 by close of business
(New
York time). In accordance with and subject to the terms of the ASE Deposit Agreement, holders of ASE ADSs have no individual voting
rights with respect to the ASE Common Shares represented by their ASE ADSs. Pursuant to the ASE Deposit Agreement, each holder
of ASE ADSs is deemed to have authorized and directed the ASE Depositary to appoint the Chairman of ASE or his/her designee, as
Voting Representative of the ASE Depositary, the custodian or the nominee who is registered in the ROC as representative of the
holders of ASE ADSs to vote the ASE Common Shares represented by ASE ADSs as more fully described below.
In accordance with and subject to the
terms of the ASE Deposit Agreement, if holders of ASE ADSs together holding at least 51% of all the ASE ADSs outstanding as of
the record date set by the ASE Depositary for the ASE EGM, instruct the ASE Depositary, prior to the ASE ADS voting instructions
deadline, to vote in the same manner with respect to any of the proposals to be voted in at the EGM, the ASE Depositary shall
notify the Voting Representative and appoint the Voting Representative as the representative of the ASE Depositary and the holders
of ASE ADSs to attend the ASE EGM and vote, as to such proposals, all ASE Common Shares represented by ASE ADSs outstanding in
the manner so instructed by such holders. If voting instructions are received from an ASE ADS holder by the ASE Depositary as
of the ASE ADS voting instructions deadline which are signed but without further indication as to voting instructions, the ASE
Depositary shall deem such holder to have instructed a vote in favor of the items set forth in such instructions.
Furthermore, in accordance with and
subject to the terms of the ASE Deposit Agreement, if, for any reason, the ASE Depositary has not, prior to the ASE ADS voting
instructions deadline, received instructions from holders of ASE ADSs together holding at least 51% of all ASE ADSs outstanding
as of the record date set by the ASE Depositary for the ASE EGM, to vote in the same manner with respect to any of the proposals
to be voted on at the EGM, the holders of all ASE ADSs shall be deemed to have authorized and directed the ASE Depositary to give
a discretionary proxy to the Voting Representative, as the representative of the holders of ASE ADSs, to attend the ASE EGM and
vote as to such proposals, all the ASE Common Shares represented by ASE ADSs then outstanding in his discretion; provided, however,
that the ASE Depositary will not give a discretionary proxy as described if it fails to receive under the terms of the ASE Deposit
Agreement a satisfactory opinion from ASE’s counsel prior to the ASE EGM. In such circumstances, the Voting Representative
shall be free to exercise the votes attaching to the ASE Common Shares represented by ASE in any manner he wishes, which may not
be in the best interests of the ASE ADS holders. The Voting Representative has informed ASE that he plans as of the date of this
proxy statement/prospectus to vote in favor of all of the proposals at the ASE EGM, although he has not entered into any agreement
obligating him to do so.
Vote Required
. The Share
Exchange cannot be completed without ASE shareholders approving, among other things, the completion by ASE of the Share Exchange
and the other transactions contemplated by the Joint Share Exchange Agreement by either (x) the approval of one-half of the
ASE Common shares present at the ASE EGM if at least two-thirds of the outstanding ASE Common Shares attend the ASE EGM, or (y) the
approval of two-thirds of the ASE Common Shares present at the ASE EGM if at least one-half of the outstanding ASE Common Shares
attend the ASE EGM. Other than the proposal for the election of directors and supervisors of ASE Industrial Holding Co., Ltd.
which is through cumulative voting, each ASE shareholder is entitled to one vote per share for the proposals raised at the ASE
EGM.
As of November 30, 2017, there were
8,732,287,364 ASE Common Shares (including those represented by ASE ADSs) outstanding. As of November 30, 2017, ASE directors
and executive officers, as a group, beneficially owned and were entitled to vote 2,163,879,853 ASE Common Shares, or approximately
24.8% of the total outstanding share capital of ASE. ASE currently expects that these directors and executive officers will vote
their ASE Common Shares that are held at the ASE EGM Record Date in favor of all of the proposals at the ASE EGM, although none
of them has entered into any agreement obligating them to do so.
Under ROC law, ASE is prohibited from
soliciting proxies, consents or authorizations at its shareholders’ meetings, including the ASE EGM at which the Share Exchange
and the other transactions contemplated by the Joint Share Exchange Agreement will be voted upon. However, ASE Enterprises Limited
(“ASEE”), a shareholder of ASE beneficially holding approximately 15.7% of the total outstanding share capital of
ASE as of the date of this proxy statement/prospectus, has expressed that it plans to vote in favor of all of the proposals at
the ASE EGM and intends to solicit proxies in favor of the authorization and approval of the Share Exchange and the other transactions
contemplated
by the Joint Share Exchange Agreement prior to the ASE EGM. ASEE is controlled by ASE’s Chairman and Chief Executive Officer
Jason C.S. Chang.
Recommendation and Approval of the ASE Board and Reasons
for the Share Exchange (see page 38)
The ASE Board recommends that ASE shareholders
vote “FOR” each of the proposals to be presented at the ASE EGM.
In the course of reaching its decision
to approve the Share Exchange and the other transactions contemplated by the Joint Share Exchange Agreement, the ASE board of directors
(the “ASE Board”) considered a number of factors in its deliberations. For a more complete discussion of these factors,
see the section entitled “Special Factors —Recommendation and Approval of the ASE Board and Reasons for the Share Exchange.”
Interests of ASE in SPIL Common Shares and ADSs (see
page 40)
On October 1, 2015, ASE closed its
acquisition of, and paid for, 779,000,000 SPIL Common Shares (including those represented by SPIL ADSs) pursuant to the tender
offers in the U.S. and in the ROC (the “Initial ASE Tender Offers”). In March and April 2016, ASE acquired an additional
258,300,000 SPIL Common Shares (including those represented by SPIL ADSs) through open market purchases. As of the date of this
proxy statement/prospectus, ASE held 988,847,740 SPIL Common Shares and 9,690,452 SPIL ADSs, representing 33.29% of the issue and
outstanding share of SPIL.
Except as set forth elsewhere in this proxy
statement/prospectus: (a) none of ASE and, to ASE's knowledge, any associate or majority-owned subsidiary of ASE beneficially
owns or has a right to acquire any SPIL Common Shares, SPIL ADSs or other equity securities of SPIL; (b) none of ASE and,
to ASE's knowledge, any associate or majority-owned subsidiary of ASE has effected any transaction in SPIL Common Shares, SPIL
ADSs or other equity securities of SPIL during the past 60 days; and (c) during the two years before the date of this
proxy statement/prospectus, there have been no transactions between ASE, its subsidiaries, on the one hand, and SPIL or any of
its executive officers, directors, controlling shareholders or affiliates, on the other hand, that would require reporting under
SEC rules and regulations.
Opinions of ASE’s Independent Expert (see
page 41)
On May 25, 2016, Mr. Ji-Sheng Chiu, CPA,
of Crowe Horwath (TW) CPAs Firm, an independent expert engaged by ASE, delivered to ASE its written opinion (the “First Crowe
Horwath Opinion”) that the cash consideration of NT$55 per SPIL Common Share to be paid by HoldCo under the Share Exchange
and the Exchange Ratio in which ASE Common Shares will be exchanged for HoldCo Common Shares as stipulated in the Joint Share Exchange
Memorandum of Understanding (“Joint Share Exchange MOU”) were reasonable and fair. On June 29, 2016, Mr. Ji-Sheng Chiu
delivered to ASE an opinion that the Cash Consideration (including conditions for adjustments) per SPIL Common Share to be paid
by HoldCo in the Share Exchange and the Exchange Ratio in which ASE Common Shares will be exchanged for HoldCo Common Shares as
stipulated in the Joint Share Exchange Agreement were reasonable and fair (the “Second Crowe Horwath Opinion,” and
together with the First Crowe Horwath Opinion, the “Crowe Horwath Opinions”). The Crowe Horwath Opinions will be available
for any interested ASE shareholder (or any representative of an ASE shareholder who has been so designated in writing) to inspect
and copy at ASE’s principal executive offices during regular business hours.
Financing of the Share Exchange (see page 53)
HoldCo intends to fund the Cash Consideration
(including the NT$51.2 per SPIL Common Share Cash Consideration payable to holders of the SPIL Convertible Bonds that have not
been otherwise redeemed or repurchased by the SPIL, or cancelled or converted prior to the Effective Time), which is in an aggregate
amount of approximately NT$173.16 billion (US$5.71 billion), with a combination of ASE’s cash on hand and debt financing.
Subject to the amount of cash on hand at the time when ASE arranges for financing, ASE may arrange bank loans up to NT$173 billion
(US$5.70 billion) with a combination of a syndication loan of NT$120 billion (US$3.96 billion) and a short-term bridge loan of
NT$53 billion (US$1.75 billion). In a highly confident letter dated November 7, 2016 issued by Citibank Taiwan Limited (“Citibank”)
to ASE, Citibank stated that it is highly
confident
of its ability to arrange debt facilities for the Share Exchange up to an amount of US$3.8 billion equivalent. In another highly
confident letter dated November 16, 2016 issued by DBS Bank Ltd., Taipei Branch (“DBS”) to ASE, DBS stated that it
is confident of its ability to arrange debt facilities for the Share Exchange up to an amount of NT$53 billion (US$1.75 billion).
Both highly confident letters contained certain customary conditions to the arrangement of such facilities, including the following
material conditions: (i) the applicable bank being appointed as the bookrunner and arranger of the facility, (ii) completion of
customary due diligence with the results being satisfactory to the applicable bank, (iii) final agreement on the pricing, terms
and conditions for the facility, (iv) negotiation, execution and delivery of financing documentation in form and substance satisfactory
to the applicable bank, (v) receipt of all relevant approvals in connection with the Share Exchange, including approval of the
credit committee of the applicable bank, (vi) consummation of the Share Exchange on terms and conditions satisfactory to the applicable
bank, and (vii) market conditions at the relevant time being satisfactory to the applicable bank.
In addition, on December 8, 2016, the
ASE Board approved a capital increase in which ASE offered 300 million new ASE Common Shares, par value NT$10 per share. The subscription
price was later set at NT$34.3 (US$1.13) per share and the total amount of proceeds of such capital increase was NT$10.29 billion
(US$339.27 million). Eighty percent of such new ASE Common Shares was subscribed for by ASE’s existing shareholders on a
pro rata basis (the “Rights Offering”), ten percent of such new ASE Common Shares was subscribed for by ASE’s
employees and the remaining ten percent of such new ASE Common Shares was sold to the general public in Taiwan. On December 16,
2016, ASE filed with the SEC a registration statement on Form F-3 and a preliminary prospectus supplement in connection with the
Rights Offering. On February 3, 2017 and March 28, 2017, ASE filed with the SEC a prospectus supplement on Form 424B5 in connection
with the Rights Offering. ASE used the proceeds of the capital increase to reduce or retire existing indebtedness, which improved
its capital position and free up its borrowing capacity to facilitate the incurrence of indebtedness to finance the Share Exchange.
Board of Directors and Management of HoldCo Following
Completion of the Share Exchange (see page 50)
Under ROC law, since HoldCo has not
come into existence before the Effective Time, ASE will hold a shareholders’ meeting for ASE’s shareholders (also
the incorporators of HoldCo) to elect members of the board of directors and supervisors for HoldCo. The ASE EGM will function
as HoldCo’s incorporators’ meeting by operation of law. Therefore, at the ASE EGM, shareholders of ASE will elect
the members of the board of directors and supervisors of HoldCo.
Under the terms of the Joint Share
Exchange Agreement, at HoldCo’s incorporators’ meeting, nine to 13 directors and three supervisors will be elected
for HoldCo, which terms of such directors and supervisors will start from the Effective Time. SPIL’s Chairman and President
are expected to be appointed as directors on HoldCo’s board of directors. After the completion of the Share Exchange, subject
to ASE shareholders adopting the HoldCo director and supervisor election proposals, the board of directors of HoldCo is expected
to include Jason C.S. Chang (management director, Chairman), Richard H.P. Chang (management director, Vice-Chairman), Bough Lin
(management director),Chi-Wen Tsai (management director), Rutherford Chang (management director), Tien Wu (management director),
Joseph Tung (management director), Raymond Lo (management director),Tien-Szu Chen (management director), Jeffrey Chen (management
director),and Freddie Liu (non-management director). Alan Cheng, Yuan-Chuang Fung and Fang-Yin Chen are expected to be the supervisors
of HoldCo.
From and after the Effective Time,
the board of directors of HoldCo will establish an audit committee which will consist of one non-management director, Freddie
Liu, who is expected to be independent under Rule 10A-3 of the Exchange Act and financially literate with accounting or related
financial management expertise. ASE is currently, and upon completion of the Share Exchange, HoldCo will be, subject to NYSE corporate
governance, as applicable to foreign private issuers. It is expected that the audit committee of HoldCo established on the Effective
Time would satisfy and comply with the requirements of section 303A.06 of the NYSE Listing Company Manual.
Certain ROC and U.S. Federal Income Tax Consequences
of the Share Exchange (see page 54)
ROC Taxation
Capital gains realized upon the Share Exchange
are exempt from ROC income tax. In the view of Baker & McKenzie, by reasonable interpretation of the ROC Mergers and Acquisitions
Act based on current rules and regulations promulgated by ROC tax authority, ASE’s shareholders should not be subject to
ROC securities transaction tax upon the Share Exchange. See the section entitled “Special Factors — Certain ROC and
U.S. Federal Income Tax Consequences of the Share Exchange for Holders of ASE Common Shares or ADSs — ROC Taxation”
for further discussion.
United States Taxation
Based on certain representations from ASE
and assuming ASE has not been a PFIC for any taxable year during which the U.S. Holder has owned ASE Common Shares or ADSs, a U.S.
Holder (as defined below) of ASE Common Shares or ASE ADSs is not expected to recognize any gain or loss for U.S. federal income
tax purposes upon an exchange of ASE Common Shares or ASE ADSs for HoldCo ADSs (or shares represented by such HoldCo Common Shares
or HoldCo ADSs) in the Share Exchange, except with respect to any cash received in respect of fractional HoldCo Common Shares or
fractional HoldCo ADSs or paid to dissenting U.S. Holders. See the section entitled “Special Factors — Certain ROC
and U.S. Federal Income Tax Consequences of the Share Exchange for Holders of ASE Common Shares or ADSs— United States Taxation”
for further discussion.
Accounting Treatment of the Share Exchange (see page
59)
Under IFRS, the Cash Consideration paid
by HoldCo pursuant to the Share Exchange will be accounted for by applying the acquisition method of accounting with HoldCo being
considered the acquirer of SPIL for accounting purposes. Upon the completion of the Share Exchange, HoldCo would obtain control
of SPIL and any equity interest previously held in SPIL accounted for as equity method investments is treated as if it were disposed
of and reacquired at fair value on the acquisition date. Accordingly, it is remeasured to its acquisition-date fair value, and
any resulting gain or loss compared to its carrying amount is recognized in profit or loss. HoldCo will measure the identifiable
assets acquired and the liabilities assumed at their acquisition-date fair values, and recognize goodwill as of the acquisition
date measured as the excess of the Cash Consideration and the fair value of the ASE’s previously held equity interest in
SPIL over the net of the acquisition-date fair value of the identifiable assets acquired and the liabilities assumed. Goodwill
is not amortized but is tested for impairment at least annually.
Under IFRS, the exchange of ASE Common
Shares for HoldCo Common Shares and the exchange of ASE ADSs for HoldCo ADSs based on the Exchange Ratio will be accounted for
as a legal reorganization of entities under common control. ASE and HoldCo are ultimately controlled by the same shareholders both
before and after the Share Exchange and that control is not transitory, therefore the Share Exchange under common control will
not be accounted for by applying the acquisition method as above. Accordingly, ASE will recognize no gain or loss in connection
with the exchange of ASE Common Shares for HoldCo shares upon the Share Exchange under common control, and all assets and liabilities
of ASE will be recorded on the books of HoldCo at the predecessor carrying amounts.
Regulatory Approvals Required to Complete the Share
Exchange (see page 60)
The completion of the Share Exchange
is subject to obtaining antitrust and other regulatory approvals in certain jurisdictions, as noted below. ASE and SPIL submitted
the required materials to the Taiwan Fair Trade Commission (the “TFTC”) on July 29, 2016 and the TFTC issued a no
objection letter in respect of the Share Exchange on November 16, 2016. ASE and SPIL submitted the required materials to The Ministry
of Commerce People’s Republic of China (“MOFCOM”) on August 25, 2016. MOFCOM formally accepted the parties’
notification materials on December 14, 2016, starting Phase I of the review process. MOFCOM issued notice extending its review
to Phase II review on January 12, 2017. MOFCOM issued a notice extending its review to Phase III review on April 12, 2017. On
June 5, 2017, ASE withdrew the original submission filed with MOFCOM and re-filed the same application with MOFCOM on June 5,
2017. Phase II of MOFCOM’s review began on July 5, 2017. Phase III
of
MOFCOM’s review began on September 30, 2017. On November 24, 2017, MOFCOM approved the proposed combination on the condition
that ASE and SPIL maintain independent operations, among other conditions, for 24 months. In addition, the U.S. Federal Trade
Commission (“FTC”) issued a subpoena and civil investigative demand relating to the proposed combination on October
26, 2016. On January 17, 2017, ASE and SPIL each certified that it complied with the FTC’s requests for information.
On May 15, 2017, ASE received a letter from the FTC confirming that the non-public investigation of the proposed combination had
been closed. See the section entitled “Special Factors — Regulatory Approvals Required to Complete the Share Exchange.”
Share Exchange Listing (see page 61)
It is expected that HoldCo Common Shares
will be listed on the TWSE and HoldCo ADSs will be listed on the NYSE at the Effective Time of the Share Exchange. As a result
of the Share Exchange, ASE Common Shares currently listed on the TWSE and ASE ADSs currently listed on the NYSE will cease to be
listed on the TWSE and NYSE, respectively; SPIL Common Shares currently listed on the TWSE and SPIL ADSs currently listed on NASDAQ
will cease to be listed on the TWSE and NASDAQ, respectively.
The following is a tentative timetable
of the various trading-related events in connection with the completion of the Share Exchange:
Final trading day for ASE Common Shares
and SPIL Common Shares on the TWSE
|
[DATE], 2018 (Taiwan time)
|
Final trading day for ASE ADSs on the NYSE and SPIL
ADSs on NASDAQ
|
[DATE], 2018 (New York time)
|
Effective date of the Share Exchange
|
[DATE], 2018 (Taiwan time)
|
First trading day for HoldCo Common Shares on the
TWSE
|
[DATE], 2018 (Taiwan time)
|
First trading day for HoldCo ADSs on the NYSE
|
[DATE], 2018 (New York time)
|
In advance of completion of the Share Exchange,
ASE expects to publicly announce the definitive timetable for these trading-related events.
Rights of Dissenting Shareholders (see page 62)
Under ROC law, ASE shareholders may
have dissenters’ rights of appraisal in connection with the Share Exchange. See the section entitled “Special Factors
— Rights of Dissenting Shareholders” for a complete discussion of dissenters’ rights. However, holders of ASE
ADSs will not have any appraisal rights in respect of the Share Exchange under the terms of the ASE Deposit Agreement. ASE ADS
holders who wish to be entitled to appraisal rights must cancel their ASE ADSs by close of business (New York time) on [DATE],
2018 (Taiwan time), and become holders of ASE Common Shares by [DATE], 2018.
Litigation Related to the Share Exchange (see page
64)
ASE is not aware of any lawsuit that
challenges the Share Exchange or any other transactions contemplated under the Joint Share Exchange Agreement.
Expenses Relating to the Share Exchange (see page 64)
All costs and expenses incurred in connection
with the Share Exchange, the Joint Share Exchange Agreement and the completion of the transactions contemplated by the Joint Share
Exchange Agreement will be paid by the party incurring such costs and expenses, except as otherwise explicitly provided for in
the Joint Share Exchange Agreement, whether or not the Share Exchange or any of the other transactions contemplated by the Joint
Share Exchange Agreement is completed.
Comparison of Rights of Shareholders of ASE and HoldCo
(see page 64)
From a legal perspective, ASE shareholders
receiving HoldCo Common Shares upon the completion of the Share Exchange will not have materially different rights from those they
are entitled to as ASE shareholders. See the sections entitled “Special Factors — Comparison of Rights of Shareholders
of ASE and HoldCo,” “Description of HoldCo American Depositary Shares,” and “Description of HoldCo Common
Shares” for more information.
No Solicitation by SPIL of Acquisition Proposals (see
page 88)
Under the terms of the Joint Share Exchange
Agreement, SPIL agreed not to offer, agree, enter into or sign with any third party any contract, agreement or other arrangements
in respect to certain alternative transactions, subject to certain exceptions as described in the section entitled “The Joint
Share Exchange Agreement — Pre-Closing Covenants and Agreements.”
Conditions to Consummation of the Share Exchange (see
page 90)
The obligations of ASE, SPIL and HoldCo
to consummate the Share Exchange are subject to the satisfaction of the following conditions:
|
·
|
ASE and SPIL will each have obtained unconditional approval of the Share Exchange at their respective general shareholders’
meetings;
|
|
·
|
receipt of approvals from all relevant competent authorities, including, but not limited to, (i) the TWSE and the SEC (ii)
the TFTC and MOFCOM and (iii) the FTC completing its investigation without seeking an injunction prohibiting the Share Exchange
(in the case of (ii) and (iii), including approvals or consents of conditions imposed by such authorities that both ASE and SPIL
have agreed to accept); and
|
|
·
|
no order (or agreement with the FTC) is in effect and enforceable prohibiting, enjoining or rendering illegal the consummation
of the Share Exchange, and no law shall have been enacted or enforced after the date the Joint Share Exchange Agreement was executed
rendering illegal or prohibiting the consummation of the Share Exchange; provided that the enforcement of an order or law shall
not include the decision by a governmental entity to extend the waiting period or initiate an investigation under antitrust laws
or other applicable law.
|
In addition, ASE’s and HoldCo’s
obligations to consummate the Share Exchange are subject to the satisfaction or waiver by ASE and HoldCo of the following additional
conditions:
|
·
|
all representations and warranties of SPIL are true and accurate as of the date the Joint Share Exchange Agreement was executed
and as of the Effective Time, except to the extent that no material adverse effect on SPIL has occurred;
|
|
·
|
SPIL has performed in all material respects all obligations and undertakings required to be performed by it under the Joint
Share Exchange Agreement prior to the Effective Time;
|
|
·
|
no material adverse effect to SPIL shall have occurred prior to the Effective Time; and
|
|
·
|
prior to the Effective Time, no force majeure events will have occurred which, individually or in aggregate, result in a decrease
in SPIL’s consolidated net book value by 30% or more, relative to SPIL’s net book value in its consolidated audited
financial statements as of March 31, 2016.
|
In addition, SPIL’s obligation to
consummate the Share Exchange is subject to the satisfaction or waiver of the following additional conditions:
|
·
|
all representations and warranties of ASE are true and accurate as of the date the Joint Share Exchange Agreement was executed
and as of the Effective Time, except to the extent that no material adverse effect on ASE has occurred;
|
|
·
|
all representations and warranties of HoldCo are true and accurate as of the Effective Time, except to the extent that no material
adverse effect on HoldCo has occurred;
|
|
·
|
ASE and HoldCo have performed in all material respects all obligations and undertakings required to be performed by each of
them under the Joint Share Exchange Agreement prior to the Effective Time;
|
|
·
|
no material adverse effect to ASE will have occurred prior to the Effective Time; and
|
|
·
|
prior to the Effective Time, no force majeure events will have occurred which, individually or in aggregate, result in a decrease
in ASE’s consolidated net book value by 30% or more, relative to ASE’s net book value in its consolidated audited financial
statements as of March 31, 2016.
|
The consummation of the Share Exchange
is subject to the satisfaction or waiver of all the conditions set forth above on or prior to December 31, 2017 (the “Long
Stop Date”). Pursuant to the Supplemental Agreement signed by ASE’s Chairman and SPIL’s Chairman on December
14, 2017, ASE and SPIL agreed to extend the Long Stop Date to October 31, 2018. The Supplemental Agreement will be effective upon
the approval by each of ASE’s and SPIL’s board of directors. If the closing of the Share Exchange cannot be completed
due to the failure to satisfy the conditions set forth above on or prior to the Long Stop Date, the Joint Share Exchange Agreement
will automatically terminate at midnight on the day immediately following the Long Stop Date.
ASE Board does not intend to waive (where
capable of waiver by ASE) any of these or any other conditions unless it determines that the Share Exchange is in the best interest
of ASE and ASE shareholders despite the condition(s) not being satisfied in whole or in part.
In addition, the expected timing for the
completion of the Share Exchange may be impacted by other conditions described in this proxy statement/prospectus.
Termination of Joint Share Exchange Agreement (see
page 91)
The Joint Share Exchange Agreement may
be terminated prior to the Effective Time by either ASE or SPIL if any of the following occurs:
|
·
|
a law, judgment, court order or administrative decision issued by a competent authority restricts or prohibits the consummation
of the Share Exchange, and such restriction or prohibition has been confirmed and cannot be remedied by amending the Joint Share
Exchange Agreement; or
|
|
·
|
the Joint Share Exchange Agreement and Share Exchange are not approved by ASE’s shareholders or SPIL’s shareholders
at their respective shareholder meetings.
|
The Joint Share Exchange Agreement may
also be terminated at any time prior to the Effective Time by ASE if SPIL has breached or failed to perform any of its representations,
warranties, undertakings or obligations under the Joint Share Exchange Agreement and such breach leads to the failure to satisfy
the conditions to the consummation of the Share Exchange and is by its nature not capable of being cured, or is not cured by SPIL
within 30 business days of receiving written notice of such breach, and is not waived in writing by ASE.
The Joint Share Exchange Agreement may
also be terminated at any time prior to the Effective Time by SPIL if ASE has breached or failed to perform any of its representations,
warranties, undertakings or obligations under the Joint Share Exchange Agreement and such breach leads to the failure to satisfy
the conditions to the consummation of the Share Exchange and is by its nature not capable of being cured, or is not cured by ASE
within 30 business days of receiving written notice of such breach, and is not waived in writing by SPIL.
If the Share Exchange is not consummated
on or before the Long Stop Date, the Joint Share Exchange Agreement will automatically terminate at midnight on the day immediately
following the Long Stop Date.
Termination Fees Relating to the Share Exchange (see
page 89)
SPIL may be required to pay a termination
fee of NT$17 billion (US$0.6 billion) if the Joint Share Exchange Agreement is terminated due to SPIL’s acceptance of a
Superior Proposal (as defined in the Joint Share Exchange Agreement and further explained under the caption “The Joint Share
Exchange Agreement — Pre-Closing Covenants and Agreements” beginning on page 89). See the section entitled “The
Joint Share Exchange Agreement — Pre-Closing Covenants and Agreements” for a more complete description of the circumstances
under which SPIL may be required to pay ASE a termination fee.
Remedies and Liquidated Damages (see page 91)
Upon the occurrence of certain prescribed
material events of default, in addition to any right of termination and claims for expenses, the non-defaulting party will also
be entitled to liquidated damages in the amount of NT$8.5 billion (US$0.3 billion) from the defaulting party, subject to adjustments
for contributory negligence by the non-defaulting party. See the section entitled “The Joint Share Exchange Agreement —
Termination and Events of Default” for a more complete description of the circumstances under which ASE or SPIL may be required
to pay the other party liquidated damages.
Market Price Information (see page 75)
ASE Common Shares and SPIL Common Shares
are listed on the TWSE under the stock code “2311” and “2325”, respectively. ASE ADSs and SPIL ADSs are
listed on the NYSE and NASDAQ under the symbols “ASX” and “SPIL”, respectively. The following table presents
the closing price information for ASE Common Shares, SPIL Common Shares, ASE ADSs and SPIL ADS on (a) May 25, 2016, the last trading
day before the public announcement of the execution of the Joint Share Exchange MOU, and (b) [DATE], 2017, the latest practicable
trading day before the date of this proxy statement/prospectus.
|
ASE
Common Shares
|
SPIL
Common Shares
|
ASE
ADSs
|
SPIL
ADSs
|
Date
|
NT$
|
US$
|
NT$
|
US$
|
US$
|
US$
|
May 25, 2016
|
33.05
|
1.09
|
50.50
|
1.67
|
4.89
|
7.52
|
[DATE], 2017
|
[●]
|
[●]
|
[●]
|
[●]
|
[●]
|
[●]
|
Risk Factors (See Page 66)
In determining whether to vote to approve
the Share Exchange and the other transactions contemplated by the Joint Share Exchange Agreement, you should consider carefully
the risk factors described in this document.
Recent Development
In September 2013, ASE issued US$400.0
million aggregate principal amount of zero coupon convertible bonds due 2018 (“ASE 2013 Convertible Bonds”). The ASE
2013 Convertible Bonds were offered to persons outside of the United States in compliance with Regulation S under the Securities
Act. Prior to April 2017, US$97.8 million aggregate principal amount of the ASE 2013 Convertible Bonds had been converted into
ASE Common Shares. As of the third quarter 2017, US$301.8 million aggregated principal amount of ASE 2013 Convertible Bonds had
been converted into ASE Common Shares and US$0.4 million aggregated principal amount had been redeemed. As of September 30, 2017,
there was no outstanding balance for the ASE 2013 Convertible Bonds.
In July 2014, Anstock II Limited offered
US$300.0 million aggregate principal amount of guaranteed bonds due 2017 (the “Green Bonds”). The Green Bonds are
unconditionally and irrevocably guaranteed by ASE. The Green Bonds were offered to persons outside of the United States in compliance
with Regulation S under the Securities Act. On July 24, 2017, ASE fully repaid the Green Bonds.
In July 2017, the Kaohsiung Prosecutor’s
Office indicted ASE’s Chief Operating Officer, Dr. Tien Wu, for alleged insider trading activities in SPIL Common Shares
conducted during the period when the Initial ASE Tender Offers, the Second ASE Tender Offers and negotiations of the Joint Share
Exchange MOU took place. The alleged offenses were in violations of Article 157-1 of the ROC Securities and Exchange Law. Dr.
Tien has retained counsel
and
plans to vigorously defend himself. The ultimate outcome of this case is still pending and ASE is not able to predict the actions
the Kaohsiung district court or other regulatory agencies may take in connection with this proceeding. Defending against this
proceeding will likely be costly and time consuming and significantly divert management’s efforts and resources. See the
section entitled “Risk Factors—Risks Relating to Owning HoldCo ADSs— The ongoing proceeding involving Dr. Tien
Wu could have an adverse impact on HoldCo’s business and cause HoldCo’s share price to decline.”
Selected
Consolidated Financial Data
Selected Consolidated Financial Data of ASE
The selected consolidated financial
data of ASE as of December 31, 2015 and 2016 and for the years ended December 31, 2014, 2015 and 2016 has been derived from ASE’s
audited consolidated financial statements included in its annual report on Form 20-F for the year ended December 31, 2016 filed
with the SEC on April 21, 2017 (“ASE 2016 20-F”), which is incorporated by reference into this proxy statement/prospectus.
These consolidated financial statements were prepared based on IFRS. The selected consolidated financial data as of December 31,
2012, 2013, 2014 and for the year ended December 31, 2012 and 2013, is derived from ASE’s audited consolidated financial
statements not included herein.
The information set forth below is
only a summary and is not necessarily indicative of the results of future operations of ASE or HoldCo following completion of
the Share Exchange, and you should read the following information together with ASE’s consolidated financial statements,
the related notes, and the section entitled “Item 5 —Operating and Financial Review and Prospects” contained
in ASE 2016 20-F, which are incorporated by reference into this proxy statement/prospectus. For more information, see the section
entitled “Where You Can Find More Information.”
The selected historical consolidated
statement of operations data for each of the nine-month periods ended September 30, 2016 and 2017 and the consolidated balance
sheet data as of December 31, 2016 and September 30, 2017 have been derived from ASE’s unaudited condensed consolidated
financial statements for the nine-month period ended September 30, 2017 contained in ASE’s interim report on Form 6-K furnished
with the SEC on December 14, 2017, which is incorporated by reference into this proxy statement/prospectus.
In July 2016, ASE acquired preferred
shares of Deca Technologies Inc. (“DECA”) and accounted it as investments accounted by applying the equity method.
In addition, ASE’s subsidiary, ASE Test, Inc., acquired common shares of TLJ Intertech Inc. (“TLJ”) and Advanced
Microelectronic Products Inc. (“AMPI”) in May and November 2016, respectively, and accounted them as investments accounted
by applying the subsidiary and equity method, respectively. As of September 30, 2017, ASE and ASE Test, Inc. have completed the
identification of the difference between the costs of the investments and ASE or ASE Test, Inc.’s share of the net fair
value of DECA, TLJ and AMPI’s identifiable assets and liabilities. Therefore, according to IFRS, ASE has retrospectively
adjusted the comparative financial statements for prior periods. ASE considered such retrospective adjustments to be immaterial
from both quantitative and qualitative perspectives. The balance sheet data as of September 30 and December 31, 2016 as well as
the statement of comprehensive income data for the nine months ended September 30, 2016 and for the year ended December 31, 2016
in the following table marked as “Retrospectively Adjusted” reflected the impact from the retrospective adjustments.
|
|
For
the Year Ended
December 31,
|
|
For
the Nine Months Ended
September 30,
|
IFRS
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2016
(Retrospectively Adjusted)
|
|
2016
|
|
2016
(Retrospectively
Adjusted)
|
|
2017
|
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
US$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
US$
|
|
|
|
|
|
|
(in millions, except earnings
per ASE Common Share and per ASE ADS data)
|
Statement of Comprehensive Income Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues
|
|
|
193,972.4
|
|
|
|
219,862.4
|
|
|
|
256,591.4
|
|
|
|
283,302.5
|
|
|
|
274,884.1
|
|
|
|
274,884.1
|
|
|
|
9,063.1
|
|
|
|
197,755.5
|
|
|
|
197,755.5
|
|
|
|
206,455.1
|
|
|
|
6,806.9
|
|
Operating costs
(1)
|
|
|
(157,342.7
|
)
|
|
|
(177,040.4
|
)
|
|
|
(203,002.9
|
)
|
|
|
(233,167.3
|
)
|
|
|
(221,689.9
|
)
|
|
|
(221,696.9
|
)
|
|
|
(7,309.5
|
)
|
|
|
(159,938.4
|
)
|
|
|
(159,942.8
|
)
|
|
|
(168,516.6
|
)
|
|
|
(5,556.1
|
)
|
Gross profit
(1)
|
|
|
36,629.7
|
|
|
|
42,822.0
|
|
|
|
53,588.5
|
|
|
|
50,135.2
|
|
|
|
53,194.2
|
|
|
|
53,187.2
|
|
|
|
1,753.6
|
|
|
|
37,817.1
|
|
|
|
37,812.7
|
|
|
|
37,938.5
|
|
|
|
1,250.8
|
|
Operating expenses
(1)
|
|
|
(18,922.6
|
)
|
|
|
(20,760.4
|
)
|
|
|
(23,942.7
|
)
|
|
|
(25,250.6
|
)
|
|
|
(26,485.7
|
)
|
|
|
(26,526.8
|
)
|
|
|
(874.6
|
)
|
|
|
(19,241.5
|
)
|
|
|
(19,282.6
|
)
|
|
|
(20,426.6
|
)
|
|
|
(673.4
|
)
|
Other operating income and expenses, net
|
|
|
83.2
|
|
|
|
(1,348.2
|
)
|
|
|
228.7
|
|
|
|
(251.5
|
)
|
|
|
(800.3
|
)
|
|
|
(800.3
|
)
|
|
|
(26.4
|
)
|
|
|
(704.3
|
)
|
|
|
(704.3
|
)
|
|
|
274.3
|
|
|
|
9.0
|
|
Profit from operations
(1)
|
|
|
17,790.3
|
|
|
|
20,713.4
|
|
|
|
29,874.5
|
|
|
|
24,633.1
|
|
|
|
25,908.2
|
|
|
|
25,860.1
|
|
|
|
852.6
|
|
|
|
17,871.3
|
|
|
|
17,825.8
|
|
|
|
17,786.2
|
|
|
|
586.4
|
|
Non-operating income (expense), net
(1)
|
|
|
(1,181.6
|
)
|
|
|
(1,343.6
|
)
|
|
|
(1,339.4
|
)
|
|
|
378.7
|
|
|
|
2,116.9
|
|
|
|
2,108.6
|
|
|
|
69.5
|
|
|
|
578.2
|
|
|
|
575.5
|
|
|
|
5,401.3
|
|
|
|
178.1
|
|
Profit before income tax
|
|
|
16,608.7
|
|
|
|
19,369.8
|
|
|
|
28,535.1
|
|
|
|
25,011.8
|
|
|
|
28,025.1
|
|
|
|
27,968.7
|
|
|
|
922.1
|
|
|
|
18,449.5
|
|
|
|
18,401.3
|
|
|
|
23,187.5
|
|
|
|
764.5
|
|
Income tax expense
|
|
|
(2,960.4
|
)
|
|
|
(3,499.6
|
)
|
|
|
(5,666.0
|
)
|
|
|
(4,311.1
|
)
|
|
|
(5,390.8
|
)
|
|
|
(5,390.8
|
)
|
|
|
(177.7
|
)
|
|
|
(3,230.0
|
)
|
|
|
(3,230.0
|
)
|
|
|
(4,638.0
|
)
|
|
|
(152.9
|
)
|
Profit for the year
(1)
|
|
|
13,648.3
|
|
|
|
15,870.2
|
|
|
|
22,869.1
|
|
|
|
20,700.7
|
|
|
|
22,634.3
|
|
|
|
22,577.9
|
|
|
|
744.4
|
|
|
|
15,219.5
|
|
|
|
15,171.3
|
|
|
|
18,549.5
|
|
|
|
611.6
|
|
Attributable to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owners of the Company
(1)
|
|
|
13,191.6
|
|
|
|
15,404.5
|
|
|
|
22,228.6
|
|
|
|
19,732.1
|
|
|
|
21,361.6
|
|
|
|
21,324.4
|
|
|
|
703.1
|
|
|
|
14,369.7
|
|
|
|
14,339.7
|
|
|
|
17,414.9
|
|
|
|
574.2
|
|
Non-controlling interests
(1)
|
|
|
456.7
|
|
|
|
465.7
|
|
|
|
640.5
|
|
|
|
968.6
|
|
|
|
1,272.7
|
|
|
|
1,253.5
|
|
|
|
41.3
|
|
|
|
849.8
|
|
|
|
831.6
|
|
|
|
1,134.6
|
|
|
|
37.4
|
|
|
|
|
13,648.3
|
|
|
|
15,870.2
|
|
|
|
22,869.1
|
|
|
|
20,700.7
|
|
|
|
22,634.3
|
|
|
|
22,577.9
|
|
|
|
744.4
|
|
|
|
15,219.5
|
|
|
|
15,171.3
|
|
|
|
18,549.5
|
|
|
|
611.6
|
|
Other comprehensive income (loss), net of
income tax
|
|
|
(3,830.7
|
)
|
|
|
3,233.3
|
|
|
|
5,504.4
|
|
|
|
(147.5
|
)
|
|
|
(7,959.3
|
)
|
|
|
(7,959.3
|
)
|
|
|
(262.4
|
)
|
|
|
(7,331.5
|
)
|
|
|
(7,331.5
|
)
|
|
|
(3,569.8
|
)
|
|
|
(117.7
|
)
|
Total comprehensive income for the year
|
|
|
9,817.6
|
|
|
|
19,103.5
|
|
|
|
28,373.5
|
|
|
|
20,553.2
|
|
|
|
14,675.0
|
|
|
|
14,618.6
|
|
|
|
482.0
|
|
|
|
7,888.0
|
|
|
|
7,839.8
|
|
|
|
14,979.7
|
|
|
|
493.9
|
|
Attributable
to Owners of the Company
(1)
|
|
|
9,420.4
|
|
|
|
18,509.6
|
|
|
|
27,394.3
|
|
|
|
19,659.1
|
|
|
|
13,994.1
|
|
|
|
13,956.9
|
|
|
|
460.2
|
|
|
|
7,632.6
|
|
|
|
7,602.6
|
|
|
|
14,111.2
|
|
|
|
465.3
|
|
Non-controlling interests
(1)
|
|
|
397.2
|
|
|
|
593.9
|
|
|
|
979.2
|
|
|
|
894.1
|
|
|
|
680.9
|
|
|
|
661.7
|
|
|
|
21.8
|
|
|
|
255.4
|
|
|
|
237.2
|
|
|
|
868.5
|
|
|
|
28.6
|
|
|
|
|
9,817.6
|
|
|
|
19,103.5
|
|
|
|
28,373.5
|
|
|
|
20,553.2
|
|
|
|
14,675.0
|
|
|
|
14,618.6
|
|
|
|
482.0
|
|
|
|
7,888.0
|
|
|
|
7,839.8
|
|
|
|
14,979.7
|
|
|
|
493.9
|
|
Earnings per common share
(1)(2)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
1.77
|
|
|
|
2.05
|
|
|
|
2.89
|
|
|
|
2.58
|
|
|
|
2.79
|
|
|
|
2.78
|
|
|
|
0.09
|
|
|
|
1.88
|
|
|
|
1.87
|
|
|
|
2.16
|
|
|
|
0.07
|
|
Diluted
|
|
|
1.73
|
|
|
|
1.99
|
|
|
|
2.79
|
|
|
|
2.48
|
|
|
|
2.33
|
|
|
|
2.33
|
|
|
|
0.08
|
|
|
|
1.58
|
|
|
|
1.58
|
|
|
|
1.98
|
|
|
|
0.07
|
|
Dividends per common share
(3)
|
|
|
2.05
|
|
|
|
1.05
|
|
|
|
1.29
|
|
|
|
2.00
|
|
|
|
1.60
|
|
|
|
1.60
|
|
|
|
0.05
|
|
|
|
1.60
|
|
|
|
1.60
|
|
|
|
1.40
|
|
|
|
0.05
|
|
Earnings per equivalent ADS
(1)(2)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
8.86
|
|
|
|
10.26
|
|
|
|
14.46
|
|
|
|
12.89
|
|
|
|
13.94
|
|
|
|
13.91
|
|
|
|
0.46
|
|
|
|
9.38
|
|
|
|
9.36
|
|
|
|
10.81
|
|
|
|
0.36
|
|
Diluted
|
|
|
8.65
|
|
|
|
9.96
|
|
|
|
13.93
|
|
|
|
12.38
|
|
|
|
11.67
|
|
|
|
11.64
|
|
|
|
0.38
|
|
|
|
7.90
|
|
|
|
7.88
|
|
|
|
9.88
|
|
|
|
0.33
|
|
Number of common shares
(4)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
7,445.5
|
|
|
|
7,508.5
|
|
|
|
7,687.9
|
|
|
|
7,652.8
|
|
|
|
7,662.9
|
|
|
|
7,662.9
|
|
|
|
7,662.9
|
|
|
|
7,658.5
|
|
|
|
7,658.5
|
|
|
|
8,057.6
|
|
|
|
8,057.6
|
|
Diluted
|
|
|
7,568.2
|
|
|
|
7,747.6
|
|
|
|
8,220.7
|
|
|
|
8,250.1
|
|
|
|
8,284.1
|
|
|
|
8,284.1
|
|
|
|
8,284.1
|
|
|
|
8,272.9
|
|
|
|
8,272.9
|
|
|
|
8,266.1
|
|
|
|
8,266.1
|
|
Number of equivalent ADSs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
1,489.1
|
|
|
|
1,501.7
|
|
|
|
1,537.6
|
|
|
|
1,530.6
|
|
|
|
1,532.6
|
|
|
|
1,532.6
|
|
|
|
1,532.6
|
|
|
|
1,531.7
|
|
|
|
1,531.7
|
|
|
|
1,611.5
|
|
|
|
1,611.5
|
|
Diluted
|
|
|
1,513.6
|
|
|
|
1,549.5
|
|
|
|
1,644.1
|
|
|
|
1,650.0
|
|
|
|
1,656.8
|
|
|
|
1,656.8
|
|
|
|
1,656.8
|
|
|
|
1,654.6
|
|
|
|
1,654.6
|
|
|
|
1,653.2
|
|
|
|
1,653.2
|
|
_________________________
|
(1)
|
ASE and its subsidiary, ASE Test, Inc., have completed the
identification of the difference between the costs of the investments and ASE or ASE
Test, Inc.’s share of the net fair value of investees’ identifiable assets
and liabilities in June and July 2017. Therefore, ASE has retrospectively adjusted the
comparative financial statement for the nine months ended September 30, 2016 and for
the year ended December 31, 2016, which differs from the results included in ASE’s
interim report on Form 6-K for the nine months ended September 30, 2016 and ASE 2016
20-F, respectively. See Notes 13 and 28 to the condensed consolidated financial statement
as of and for the nine months ended September 30, 2017 contained in ASE’s interim
report on Form 6-K furnished with the SEC on December 14, 2017 for more information.
|
|
(2)
|
The denominators for diluted earnings per ASE Common Share
and diluted earnings per equivalent ASE ADS are calculated to account for the potential
diluted factors, such as the exercise of options and conversion of the ASE 2013 Convertible
Bonds and the ASE 2015 Convertible Bonds into ASE Common Shares.
|
|
(3)
|
Dividends per ASE Common Share issued as a cash dividend, a
stock dividend and distribution from capital surplus.
|
|
(4)
|
Represents the weighted average number of shares after retroactive
adjustments to give effect to stock dividends. ASE Common Shares held by consolidated
subsidiaries are classified as “treasury stock,” and are deducted from the
number of ASE Common Shares outstanding.
|
|
|
As
of
December 31,
|
|
As
of
September 30,
|
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2016
(Retrospectively
Adjusted)
|
|
2016
|
|
2016
(Retrospectively Adjusted)
|
|
2017
|
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
US$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
US$
|
|
|
(in millions)
|
Balance
Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
97,495.6
|
|
|
|
132,176.5
|
|
|
|
159,955.2
|
|
|
|
156,732.8
|
|
|
|
142,789.7
|
|
|
|
142,789.7
|
|
|
|
4,707.9
|
|
|
|
143,369.2
|
|
|
|
143,369.2
|
|
|
|
139,912.2
|
|
|
|
4,613.0
|
|
Investments - non-current
(1)(2)
|
|
|
2,267.8
|
|
|
|
2,345.5
|
|
|
|
2,409.3
|
|
|
|
38,046.6
|
|
|
|
50,861.3
|
|
|
|
50,853.0
|
|
|
|
1,676.7
|
|
|
|
50,677.6
|
|
|
|
50,674.9
|
|
|
|
50,038.2
|
|
|
|
1,649.8
|
|
Property, plant
and equipment, net
|
|
|
127,197.8
|
|
|
|
131,497.3
|
|
|
|
151,587.1
|
|
|
|
149,997.1
|
|
|
|
143,880.2
|
|
|
|
143,880.2
|
|
|
|
4,743.8
|
|
|
|
145,208.9
|
|
|
|
145,208.9
|
|
|
|
136,982.0
|
|
|
|
4,516.4
|
|
Intangible assets
(1)
|
|
|
12,361.3
|
|
|
|
11,953.6
|
|
|
|
11,913.3
|
|
|
|
11,888.6
|
|
|
|
12,119.9
|
|
|
|
12,107.6
|
|
|
|
399.2
|
|
|
|
12,217.1
|
|
|
|
12,207.5
|
|
|
|
11,830.1
|
|
|
|
390.0
|
|
Long-term prepayment
for lease
|
|
|
4,164.1
|
|
|
|
4,072.3
|
|
|
|
2,586.0
|
|
|
|
2,556.2
|
|
|
|
2,237.0
|
|
|
|
2,237.0
|
|
|
|
73.8
|
|
|
|
2,382.4
|
|
|
|
2,382.4
|
|
|
|
7,809.5
|
|
|
|
257.5
|
|
Others
(3)
|
|
|
4,236.0
|
|
|
|
4,676.9
|
|
|
|
5,267.9
|
|
|
|
5,765.6
|
|
|
|
6,063.1
|
|
|
|
6,063.1
|
|
|
|
199.8
|
|
|
|
6,830.7
|
|
|
|
6,830.7
|
|
|
|
13,523.6
|
|
|
|
445.9
|
|
Total assets
(1)
|
|
|
247,722.6
|
|
|
|
286,722.1
|
|
|
|
333,718.8
|
|
|
|
364,986.9
|
|
|
|
357,951.2
|
|
|
|
357,930.6
|
|
|
|
11,801.2
|
|
|
|
360,685.9
|
|
|
|
360,673.6
|
|
|
|
360,095.6
|
|
|
|
11,872.6
|
|
Short-term debts
(4)
|
|
|
36,884.9
|
|
|
|
44,618.2
|
|
|
|
41,176.0
|
|
|
|
36,983.4
|
|
|
|
20,955.5
|
|
|
|
20,955.5
|
|
|
|
690.9
|
|
|
|
33,007.5
|
|
|
|
33,007.5
|
|
|
|
19,638.4
|
|
|
|
647.5
|
|
Current portion
of long-term debts
|
|
|
3,213.8
|
|
|
|
6,016.5
|
|
|
|
2,835.5
|
|
|
|
16,843.3
|
|
|
|
16,341.1
|
|
|
|
16,341.1
|
|
|
|
538.8
|
|
|
|
15,769.2
|
|
|
|
15,769.2
|
|
|
|
13,018.6
|
|
|
|
429.2
|
|
Long-term debts
(5)
|
|
|
44,591.7
|
|
|
|
50,166.5
|
|
|
|
55,375.8
|
|
|
|
66,535.1
|
|
|
|
74,354.9
|
|
|
|
74,354.9
|
|
|
|
2,451.5
|
|
|
|
71,127.2
|
|
|
|
71,127.2
|
|
|
|
49,888.8
|
|
|
|
1,644.9
|
|
Other liabilities
(6)
|
|
|
53,211.8
|
|
|
|
60,176.9
|
|
|
|
78,640.1
|
|
|
|
78,700.1
|
|
|
|
79,437.9
|
|
|
|
79,437.9
|
|
|
|
2,619.1
|
|
|
|
81,113.8
|
|
|
|
81,113.8
|
|
|
|
81,453.1
|
|
|
|
2,685.6
|
|
Total
liabilities
|
|
|
137,902.2
|
|
|
|
160,978.1
|
|
|
|
178,027.4
|
|
|
|
199,061.9
|
|
|
|
191,089.4
|
|
|
|
191,089.4
|
|
|
|
6,300.3
|
|
|
|
201,017.7
|
|
|
|
201,017.7
|
|
|
|
163,998.9
|
|
|
|
5,407.2
|
|
Share capital
|
|
|
76,047.7
|
|
|
|
78,180.3
|
|
|
|
78,715.2
|
|
|
|
79,185.7
|
|
|
|
79,568.0
|
|
|
|
79,568.0
|
|
|
|
2,623.4
|
|
|
|
79,509.1
|
|
|
|
79,509.1
|
|
|
|
87,255.1
|
|
|
|
2,876.9
|
|
Non-controlling interests
(2)
|
|
|
3,505.7
|
|
|
|
4,128.4
|
|
|
|
8,209.9
|
|
|
|
11,492.5
|
|
|
|
11,984.0
|
|
|
|
12,000.6
|
|
|
|
395.7
|
|
|
|
11,057.6
|
|
|
|
11,075.3
|
|
|
|
12,790.8
|
|
|
|
421.7
|
|
Equity attributable
to owners of the Company
(1)(2)
|
|
|
106,314.7
|
|
|
|
121,615.6
|
|
|
|
147,481.5
|
|
|
|
154,432.5
|
|
|
|
154,877.8
|
|
|
|
154,840.6
|
|
|
|
5,105.2
|
|
|
|
148,610.6
|
|
|
|
148,580.6
|
|
|
|
183,305.9
|
|
|
|
6,043.7
|
|
_________________________
|
(1)
|
ASE and its subsidiary, ASE Test, Inc., have completed the
identification of the difference between the costs of the investments and ASE or ASE
Test, Inc.’s share of the net fair value of investees’ identifiable assets
and liabilities in June and July 2017. Therefore, ASE has retrospectively adjusted the
comparative financial statement for the nine months ended September 30, 2016 and for
the year ended December 31, 2016, which differs from the results included in ASE’s
interim report on Form 6-K for the nine months ended September 30, 2016 and ASE 2016
20-F, respectively. See Notes 13 and 28 to the condensed consolidated financial statement
as of and for the nine months ended September 30, 2017 contained in ASE’s interim
report on Form 6-K furnished with the SEC on December 14, 2017 for more information.
|
|
(2)
|
Including available-for-sale financial assets — non-current
and investments accounted for using the equity method.
|
|
(3)
|
Including investment properties, deferred tax assets, other financial assets —
non-current and other non-current assets.
|
|
(4)
|
Including short-term bank loans and short-term bills payable.
|
|
(5)
|
Including bonds payable, long-term borrowings (consisting of
bank loans and bills payable) and capital lease obligations.
|
|
(6)
|
Including (x) current liabilities other than short-term debts
and current portion of long-term debts and (y) non-current liabilities other than long-term
debts.
|
|
|
For
the Year Ended
December 31,
|
|
For
the Nine Months Ended
September 30,
|
IFRS
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2016
(Retrospectively Adjusted)
|
|
2016
|
|
2016
(Retrospectively Adjusted)
|
|
2017
|
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
US$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
US$
|
|
|
(in millions)
|
Cash Flow Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(39,029.5
|
)
|
|
|
(29,142.7
|
)
|
|
|
(39,599.0
|
)
|
|
|
(30,280.1
|
)
|
|
|
(26,714.2
|
)
|
|
|
(26,714.2
|
)
|
|
|
(880.8
|
)
|
|
|
(20,391.1
|
)
|
|
|
(20,391.1
|
)
|
|
|
(19,897.3
|
)
|
|
|
(656.0
|
)
|
Depreciation and amortization
|
|
|
23,435.9
|
|
|
|
25,470.9
|
|
|
|
26,350.8
|
|
|
|
29,518.7
|
|
|
|
29,422.3
|
|
|
|
29,470.4
|
|
|
|
971.7
|
|
|
|
22,038.6
|
|
|
|
22,084.1
|
|
|
|
21,784.3
|
|
|
|
718.2
|
|
Net cash inflow from operating activities
|
|
|
33,038.0
|
|
|
|
41,296.0
|
|
|
|
45,863.5
|
|
|
|
57,548.3
|
|
|
|
52,107.9
|
|
|
|
52,107.9
|
|
|
|
1,718.0
|
|
|
|
36,712.1
|
|
|
|
36,712.1
|
|
|
|
33,269.0
|
|
|
|
1,096.9
|
|
Net cash outflow from investing activities
|
|
|
(43,817.8
|
)
|
|
|
(29,925.8
|
)
|
|
|
(38,817.9
|
)
|
|
|
(63,351.4
|
)
|
|
|
(43,159.5
|
)
|
|
|
(43,159.5
|
)
|
|
|
(1,423.0
|
)
|
|
|
(37,137.2
|
)
|
|
|
(37,137.2
|
)
|
|
|
(14,480.2
|
)
|
|
|
(477.4
|
)
|
Net cash inflow (outflow) from financing activities
|
|
|
8,455.8
|
|
|
|
12,794.9
|
|
|
|
(2,797.0
|
)
|
|
|
8,636.3
|
|
|
|
(21,087.0
|
)
|
|
|
(21,087.0
|
)
|
|
|
(695.3
|
)
|
|
|
(11,839.8
|
)
|
|
|
(11,839.8
|
)
|
|
|
(14,748.1
|
)
|
|
|
(486.3
|
)
|
Selected Consolidated Financial Data of SPIL
The selected consolidated financial
data of SPIL as of December 31, 2015 and 2016 and for the years ended December 31, 2014, 2015 and 2016 has been derived from SPIL’s
audited consolidated financial statements included in its annual report on Form 20-F for the year ended December 31, 2016 filed
with the SEC on April 11, 2017 (“SPIL 2016 20-F”), which is incorporated by reference into this proxy statement/prospectus.
The selected consolidated financial data as of December 31, 2012, 2013 and 2014 and for the years ended December 31, 2012 and
2013, is derived from SPIL’s audited consolidated financial statements not included herein. These consolidated financial
statements were prepared based on IFRS. The information set forth below is not necessarily indicative of future results and should
be read in conjunction with “Item 5. Operating and Financial Review and Prospects” and the consolidated financial
statements, related notes and other financial information included in the SPIL 2016 20-F, which are incorporated into this proxy
statement/prospectus by reference. For more information, see the section entitled “Where You Can Find More Information.”
The selected historical financial information
as of September 30, 2017 and for each of the nine-month periods ended September 30, 2016 and 2017, respectively, have been derived
from SPIL’s unaudited consolidated financial statements, prepared in accordance with IFRS and contained in SPIL’s
interim report on Form 6-K furnished with the SEC on December 14, 2017, which is incorporated into this proxy statement/prospectus
by reference.
|
|
For
the Year Ended
December 31,
|
|
For
the Nine Months Ended
September 30,
|
IFRS
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2016
|
|
2017
|
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
US$
|
|
NT$
|
|
NT$
|
|
US$
|
|
|
(in millions, except earnings per SPIL Common Share and
per SPIL ADS data)
|
Statement of Comprehensive Income Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues
|
|
|
64,654.6
|
|
|
|
69,356.2
|
|
|
|
83,071.4
|
|
|
|
82,839.9
|
|
|
|
85,111.9
|
|
|
|
2,806.2
|
|
|
|
62,934.4
|
|
|
|
61,931.6
|
|
|
|
2,041.9
|
|
Operating costs
|
|
|
(52,915.6
|
)
|
|
|
(54,925.7
|
)
|
|
|
(62,081.3
|
)
|
|
|
(61,230.6
|
)
|
|
|
(65,762.2
|
)
|
|
|
(2,168.2
|
)
|
|
|
(48,812.5
|
)
|
|
|
(49,602.7
|
)
|
|
|
(1,635.4
|
)
|
Gross profit
|
|
|
11,739.0
|
|
|
|
14,430.5
|
|
|
|
20,990.1
|
|
|
|
21,609.3
|
|
|
|
19,349.7
|
|
|
|
638.0
|
|
|
|
14,121.9
|
|
|
|
12,328.9
|
|
|
|
406.5
|
|
Operating expenses
|
|
|
(5,351.2
|
)
|
|
|
(7,391.6
|
)
|
|
|
(7,169.0
|
)
|
|
|
(8,354.8
|
)
|
|
|
(8,563.6
|
)
|
|
|
(282.3
|
)
|
|
|
(6,377.4
|
)
|
|
|
(5,973.7
|
)
|
|
|
(197.0
|
)
|
Other operating income and expenses, net
|
|
|
4.6
|
|
|
|
61.2
|
|
|
|
284.3
|
|
|
|
(255.8
|
)
|
|
|
(117.0
|
)
|
|
|
(3.9
|
)
|
|
|
(184.9
|
)
|
|
|
36.5
|
|
|
|
1.2
|
|
Profit from operations
|
|
|
6,392.4
|
|
|
|
7,100.1
|
|
|
|
14,105.4
|
|
|
|
12,998.7
|
|
|
|
10,669.1
|
|
|
|
351.8
|
|
|
|
7,559.6
|
|
|
|
6,391.7
|
|
|
|
210.7
|
|
Non-operating income (expense), net
|
|
|
399.5
|
|
|
|
348.6
|
|
|
|
162.8
|
|
|
|
(2,621.2
|
)
|
|
|
1,005.0
|
|
|
|
33.1
|
|
|
|
732.8
|
|
|
|
373.9
|
|
|
|
12.4
|
|
Profit before income tax
|
|
|
6,791.9
|
|
|
|
7,448.7
|
|
|
|
14,268.2
|
|
|
|
10,377.5
|
|
|
|
11,674.1
|
|
|
|
384.9
|
|
|
|
8,292.4
|
|
|
|
6,765.6
|
|
|
|
223.1
|
|
Income tax expense
|
|
|
(1,229.7
|
)
|
|
|
(1,606.7
|
)
|
|
|
(3,050.1
|
)
|
|
|
(1,366.0
|
)
|
|
|
(1,867.2
|
)
|
|
|
(61.6
|
)
|
|
|
(1,038.9
|
)
|
|
|
(949.2
|
)
|
|
|
(31.3
|
)
|
Profit for the year
|
|
|
5,562.2
|
|
|
|
5,842.0
|
|
|
|
11,218.1
|
|
|
|
9,011.5
|
|
|
|
9,806.9
|
|
|
|
323.3
|
|
|
|
7,253.5
|
|
|
|
5,816.4
|
|
|
|
191.8
|
|
Attributable to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owners of the Company
|
|
|
5,562.2
|
|
|
|
5,842.0
|
|
|
|
11,218.1
|
|
|
|
9,011.5
|
|
|
|
9,806.9
|
|
|
|
323.3
|
|
|
|
7,253.5
|
|
|
|
5,816.4
|
|
|
|
191.8
|
|
Non-controlling interests
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
|
5,562.2
|
|
|
|
5,842.0
|
|
|
|
11,218.1
|
|
|
|
9,011.5
|
|
|
|
9,806.9
|
|
|
|
323.3
|
|
|
|
7,253.5
|
|
|
|
5,816.4
|
|
|
|
191.8
|
|
Other comprehensive income (loss), net of income tax
|
|
|
(223.3
|
)
|
|
|
1,058.9
|
|
|
|
3,293.4
|
|
|
|
(906.8
|
)
|
|
|
(2,373.5
|
)
|
|
|
(78.2
|
)
|
|
|
(1,518.5
|
)
|
|
|
1,091.1
|
|
|
|
36.0
|
|
Total comprehensive income for the year
|
|
|
5,338.9
|
|
|
|
6,900.9
|
|
|
|
14,511.5
|
|
|
|
8,104.7
|
|
|
|
7,433.4
|
|
|
|
245.1
|
|
|
|
5,735.0
|
|
|
|
6,907.5
|
|
|
|
227.8
|
|
Attributable to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owners of the Company
|
|
|
5,338.9
|
|
|
|
6,900.9
|
|
|
|
14,511.5
|
|
|
|
8,104.7
|
|
|
|
7,433.4
|
|
|
|
245.1
|
|
|
|
5,735.0
|
|
|
|
6,907.5
|
|
|
|
227.8
|
|
Non-controlling interests
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
|
5,338.9
|
|
|
|
6,900.9
|
|
|
|
14,511.5
|
|
|
|
8,104.7
|
|
|
|
7,433.4
|
|
|
|
245.1
|
|
|
|
5,735.0
|
|
|
|
6,907.5
|
|
|
|
227.8
|
|
Earnings per common share
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
1.81
|
|
|
|
1.89
|
|
|
|
3.60
|
|
|
|
2.89
|
|
|
|
3.15
|
|
|
|
0.10
|
|
|
|
2.33
|
|
|
|
1.87
|
|
|
|
0.06
|
|
Diluted
|
|
|
1.80
|
|
|
|
1.87
|
|
|
|
3.57
|
|
|
|
2.86
|
|
|
|
2.65
|
|
|
|
0.09
|
|
|
|
1.84
|
|
|
|
1.46
|
|
|
|
0.05
|
|
Dividends per common share
(2)
|
|
|
1.42
|
|
|
|
1.37
|
|
|
|
1.80
|
|
|
|
3.00
|
|
|
|
2.80
|
|
|
|
0.09
|
|
|
|
2.80
|
|
|
|
1.75
|
|
|
|
0.06
|
|
Earnings per equivalent ADS
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
9.03
|
|
|
|
9.43
|
|
|
|
18.00
|
|
|
|
14.46
|
|
|
|
15.73
|
|
|
|
0.52
|
|
|
|
11.65
|
|
|
|
9.35
|
|
|
|
0.31
|
|
Diluted
|
|
|
8.99
|
|
|
|
9.37
|
|
|
|
17.87
|
|
|
|
14.30
|
|
|
|
13.23
|
|
|
|
0.44
|
|
|
|
9.20
|
|
|
|
7.30
|
|
|
|
0.24
|
|
Number of common shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
3,078.3
|
|
|
|
3,098.2
|
|
|
|
3,116.4
|
|
|
|
3,116.4
|
|
|
|
3,116.4
|
|
|
|
3,116.4
|
|
|
|
3,116.4
|
|
|
|
3,116.4
|
|
|
|
3,116.4
|
|
Diluted
|
|
|
3,094.2
|
|
|
|
3,116.6
|
|
|
|
3,139.5
|
|
|
|
3,150.1
|
|
|
|
3,410.7
|
|
|
|
3,410.7
|
|
|
|
3,403.9
|
|
|
|
3,412.0
|
|
|
|
3,412.0
|
|
Number of equivalent ADSs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
615.7
|
|
|
|
619.6
|
|
|
|
623.3
|
|
|
|
623.3
|
|
|
|
623.3
|
|
|
|
623.3
|
|
|
|
623.3
|
|
|
|
623.3
|
|
|
|
623.3
|
|
Diluted
|
|
|
618.8
|
|
|
|
623.3
|
|
|
|
627.9
|
|
|
|
630.0
|
|
|
|
682.1
|
|
|
|
682.1
|
|
|
|
680.8
|
|
|
|
682.4
|
|
|
|
682.4
|
|
_________________________
|
(1)
|
The denominators for diluted earnings per SPIL Common Share
and diluted earnings per equivalent SPIL ADS are calculated to account for the potential
diluted factors, such as conversion of SPIL Convertible Bonds into SPIL Common
Shares.
|
|
(2)
|
Dividends per SPIL Common Share issued as a cash dividend and distribution from capital surplus.
|
|
|
As
of
December 31,
|
|
As
of
September 30,
|
IFRS
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2016
|
|
2017
|
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
US$
|
|
NT$
|
|
US$
|
|
|
(in millions)
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
33,445.6
|
|
|
|
37,825.1
|
|
|
|
55,207.9
|
|
|
|
48,785.2
|
|
|
|
50,451.3
|
|
|
|
1,663.4
|
|
|
|
44,914.8
|
|
|
|
46,610.1
|
|
|
|
1,536.8
|
|
Investments - non-current
(1)
|
|
|
6,068.1
|
|
|
|
6,703.0
|
|
|
|
9,076.3
|
|
|
|
8,049.1
|
|
|
|
6,017.2
|
|
|
|
198.4
|
|
|
|
7,028.9
|
|
|
|
7,582.6
|
|
|
|
250.0
|
|
Property, plant and equipment, net
|
|
|
49,927.4
|
|
|
|
55,196.8
|
|
|
|
63,520.7
|
|
|
|
64,305.6
|
|
|
|
65,380.4
|
|
|
|
2,155.6
|
|
|
|
66,331.5
|
|
|
|
64,789.6
|
|
|
|
2,136.2
|
|
Intangible assets
|
|
|
516.1
|
|
|
|
355.3
|
|
|
|
249.2
|
|
|
|
192.8
|
|
|
|
175.9
|
|
|
|
5.8
|
|
|
|
181.0
|
|
|
|
123.5
|
|
|
|
4.1
|
|
Others
(2)
|
|
|
1,895.5
|
|
|
|
1,738.7
|
|
|
|
1,698.4
|
|
|
|
1,876.5
|
|
|
|
1,702.5
|
|
|
|
56.2
|
|
|
|
1,737.1
|
|
|
|
1,884.9
|
|
|
|
62.1
|
|
Total assets
|
|
|
91,852.7
|
|
|
|
101,818.9
|
|
|
|
129,752.5
|
|
|
|
123,209.2
|
|
|
|
123,727.3
|
|
|
|
4,079.4
|
|
|
|
120,193.3
|
|
|
|
120,990.7
|
|
|
|
3,989.2
|
|
Short-term debts
(3)
|
|
|
2,468.4
|
|
|
|
2,533.9
|
|
|
|
2,690.3
|
|
|
|
2,790.1
|
|
|
|
2,741.3
|
|
|
|
90.4
|
|
|
|
2,665.6
|
|
|
|
3,479.9
|
|
|
|
114.7
|
|
Current portion of long-term debts
|
|
|
3,148.6
|
|
|
|
3,154.2
|
|
|
|
6,970.1
|
|
|
|
5,991.1
|
|
|
|
16,213.4
|
|
|
|
534.6
|
|
|
|
4,972.7
|
|
|
|
14,651.6
|
|
|
|
483.1
|
|
Long-term debts
(4)
|
|
|
12,038.2
|
|
|
|
15,355.6
|
|
|
|
24,669.5
|
|
|
|
20,485.3
|
|
|
|
14,840.0
|
|
|
|
489.3
|
|
|
|
24,044.8
|
|
|
|
13,753.3
|
|
|
|
453.5
|
|
Other liabilities
(5)
|
|
|
15,279.4
|
|
|
|
18,903.5
|
|
|
|
24,648.8
|
|
|
|
24,413.5
|
|
|
|
24,812.1
|
|
|
|
818.1
|
|
|
|
25,088.2
|
|
|
|
22,531.5
|
|
|
|
742.9
|
|
Total liabilities
|
|
|
32,934.6
|
|
|
|
39,947.2
|
|
|
|
58,978.7
|
|
|
|
53,680.0
|
|
|
|
58,606.8
|
|
|
|
1,932.4
|
|
|
|
56,771.3
|
|
|
|
54,416.3
|
|
|
|
1,794.2
|
|
Share capital
|
|
|
31,163.6
|
|
|
|
31,163.6
|
|
|
|
31,163.6
|
|
|
|
31,163.6
|
|
|
|
31,163.6
|
|
|
|
1,027.5
|
|
|
|
31,163.6
|
|
|
|
31,163.6
|
|
|
|
1,027.5
|
|
Non-controlling interests
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
-
|
|
|
|
–
|
|
|
|
–
|
|
Equity attributable to owners of the Company
|
|
|
58,918.1
|
|
|
|
61,871.7
|
|
|
|
70,773.8
|
|
|
|
69,529.2
|
|
|
|
65,120.5
|
|
|
|
2,147.1
|
|
|
|
63,422.0
|
|
|
|
66,574.4
|
|
|
|
2,195.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
_________________________
|
(1)
|
Including available-for-sale financial assets — non-current and investments accounted for using the equity method.
|
|
(2)
|
Including deferred tax assets, other financial assets — non-current and other non-current assets.
|
|
(3)
|
Including short-term bank loans and short-term bills payable.
|
|
(4)
|
Including convertible bonds and long-term loans.
|
|
(5)
|
Including current liabilities other than short-term debts and current portion of long-term debts, non-current liabilities other
than long-term debts and current income tax liabilities.
|
|
|
For
the Year Ended
December 31,
|
|
For
the Nine Months Ended
September 30,
|
IFRS
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2016
|
|
2017
|
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
NT$
|
|
US$
|
|
NT$
|
|
NT$
|
|
US$
|
|
|
(in millions)
|
Cash Flow Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(15,142.3
|
)
|
|
|
(14,978.7
|
)
|
|
|
(19,560.7
|
)
|
|
|
(13,855.4
|
)
|
|
|
(15,295.1
|
)
|
|
|
(504.3
|
)
|
|
|
(11,858.8
|
)
|
|
|
(10,626.9
|
)
|
|
|
(350.4
|
)
|
Depreciation and amortization
|
|
|
10,100.4
|
|
|
|
11,033.7
|
|
|
|
12,435.8
|
|
|
|
13,513.9
|
|
|
|
13,291.2
|
|
|
|
438.2
|
|
|
|
9,939.1
|
|
|
|
10,784.6
|
|
|
|
355.6
|
|
Net cash inflow from operating activities
|
|
|
13,366.1
|
|
|
|
17,747.9
|
|
|
|
24,945.2
|
|
|
|
26,784.2
|
|
|
|
20,844.6
|
|
|
|
687.3
|
|
|
|
13,668.7
|
|
|
|
13,083.6
|
|
|
|
431.4
|
|
Net cash outflow from investing activities
|
|
|
(15,872.4
|
)
|
|
|
(15,588.3
|
)
|
|
|
(19,243.8
|
)
|
|
|
(16,587.4
|
)
|
|
|
(14,041.7
|
)
|
|
|
(463.0
|
)
|
|
|
(10,607.1
|
)
|
|
|
(10,148.7
|
)
|
|
|
(334.6
|
)
|
Net cash inflow (outflow) from financing activities
|
|
|
2,520.1
|
|
|
|
(1,150.3
|
)
|
|
|
7,292.2
|
|
|
|
(15,096.3
|
)
|
|
|
(7,161.3
|
)
|
|
|
(236.1
|
)
|
|
|
(8,751.1
|
)
|
|
|
(6,506.0
|
)
|
|
|
(214.5
|
)
|
Ratio of Earnings to Fixed Charges of SPIL
|
|
For
the Year Ended December 31,
|
|
For
the Nine Months Ended
September
30,
|
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2016
|
|
2017
|
Ratio of earnings to fixed charges
(1)
|
|
|
25.27
|
|
|
|
18.62
|
|
|
|
24.70
|
|
|
|
15.49
|
|
|
|
15.90
|
|
|
|
15.36
|
|
|
|
11.67
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
_________________________
|
(1)
|
For purposes of calculating the ratio of earnings to fixed charges, earnings consist of income before income tax expenses from
continuing operations before adjustment for equity in losses of affiliated companies adding fixed charges and subtracting preference
security dividend requirements of consolidated subsidiaries. Fixed charges consist of interest expensed, amortized discounts related
to indebtedness, an estimate of the interest within rental expense and preference security dividend requirements of consolidated
subsidiaries.
|
Net book value per share per SPIL Common Share
Based on SPIL’s financial statements
as of and for the nine months ended September 30, 2017, SPIL’s net book value per share as of September 30, 2017, calculated
by dividing total shareholders’ equity by the number of SPIL Common Shares (including those represented by SPIL ADSs) outstanding,
was NT$21.36 (US$0.70).
Selected
Unaudited Pro Forma Condensed Combined Financial Data
The following sets forth the unaudited
pro forma condensed combined financial data of HoldCo after giving effect to the Share Exchange of acquiring ASE and SPIL based
upon the assumptions and adjustments described in the section entitled “Unaudited Pro Forma Condensed Financial Statements”.
The selected unaudited pro forma condensed
combined statements of operations for the nine months ended September 30, 2017 and for the year ended December 31, 2016 have been
prepared to give effect to the Share Exchange as if it had occurred on January 1, 2016. The selected unaudited pro forma condensed
balance sheet as of September 30, 2017 has been prepared to give effect to the Share Exchange as if it had been completed on September
30, 2017.
The selected pro forma condensed combined
financial data, which is preliminary in nature, has been derived from, and should be read in conjunction with, the more detailed
unaudited pro forma combined financial information of the combined company and the accompanying notes appearing in the section
entitled “Unaudited Pro Forma Condensed Financial Statements.” The unaudited pro forma condensed financial statements
have been presented in accordance with SEC Regulation S-X Article 11 and are not necessarily indicative of what the combined company’s
financial position or results of operations actually would have been had the Share Exchange been completed as of the Effective
Time. In addition, the selected unaudited pro forma condensed combined financial data does not purport to project the future financial
position or operating results of the combined company.
Unaudited Pro Forma Condensed Consolidated
Statements of Operations
|
|
For the Year
Ended
December 31, 2016
|
|
For the Nine
Months Ended
September 30, 2017
|
|
|
(in millions, except for per share data)
|
|
|
NT$
|
|
US$
|
|
NT$
|
|
US$
|
Operating revenue
|
|
|
359,996.0
|
|
|
|
11,869.3
|
|
|
|
268,386.7
|
|
|
|
8,848.8
|
|
Profit from operations
|
|
|
32,486.0
|
|
|
|
1,071.1
|
|
|
|
21,179.8
|
|
|
|
698.2
|
|
Profit
|
|
|
24,889.3
|
|
|
|
820.6
|
|
|
|
19,246.2
|
|
|
|
634.5
|
|
Profit attributable to HoldCo
|
|
|
23,635.8
|
|
|
|
779.3
|
|
|
|
18,111.6
|
|
|
|
597.1
|
|
Earnings per common share attributable to HoldCo common shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
5.96
|
|
|
|
0.20
|
|
|
|
4.32
|
|
|
|
0.14
|
|
Diluted
|
|
|
5.39
|
|
|
|
0.18
|
|
|
|
4.32
|
|
|
|
0.14
|
|
Earnings per ADS attributable to HoldCo common shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
29.78
|
|
|
|
0.98
|
|
|
|
21.61
|
|
|
|
0.71
|
|
Diluted
|
|
|
26.96
|
|
|
|
0.89
|
|
|
|
21.61
|
|
|
|
0.71
|
|
Unaudited Pro Forma Condensed Consolidated
Balance Sheet
|
|
As of
September 30, 2017
|
|
|
(in millions, except for per share data)
|
|
|
NT$
|
|
US$
|
Total assets
|
|
|
516,723.5
|
|
|
|
17,036.7
|
|
Total liability
|
|
|
313,430.9
|
|
|
|
10,334.0
|
|
Total equity
|
|
|
203,292.6
|
|
|
|
6,702.7
|
|
Share capital
|
|
|
41,902.4
|
|
|
|
1,381.6
|
|
Common shares
|
|
|
4,190,239,051
|
|
|
|
4,190,239,051
|
|
Book value per share attributable to HoldCo common shareholders
|
|
|
45.46
|
|
|
|
1.5
|
|
Book value per ADS attributable to HoldCo common shareholders
|
|
|
227.32
|
|
|
|
7.49
|
|
Comparative
Historical and Unaudited Pro Forma Per Share Data
The following tables set forth, as at the
dates and for the periods indicated, comparative historical unaudited and pro forma unaudited combined per share financial information
for HoldCo’s Common Shares. This information should be read in conjunction with, and the information is qualified in its
entirety by, the consolidated financial statements and the accompanying notes of ASE and SPIL included in their respective annual
reports on Form 20-F and interim reports on Form 6-K, incorporated herein by reference. See the section entitled “Where You
Can Find More Information.”
The following pro forma information has
been prepared in accordance with the rules and regulations of the SEC and accordingly includes the effects of applying the acquisition
method of accounting. This information is based on assumptions that we believe are reasonable under the circumstances. You should
not rely on the pro forma combined amounts as they are not necessarily indicative of the operating results or financial position
that would have occurred if the Share Exchange had been completed as of the dates indicated, nor are they indicative of the future
operating results or financial position of HoldCo.
The pro forma data included in the
following tables assume that the Share Exchange had occurred on January 1, 2016 for results of operations purposes and on September
30, 2017 for financial position purposes; and that the Share Exchange is accounted for by applying the acquisition method of accounting
with ASE treated as the accounting acquirer and SPIL treated as the acquired company for financial reporting purposes.
|
|
For the Year
Ended
December 31, 2016
|
|
For the Nine
Months Ended
September 30, 2017
|
|
|
NT$
|
|
US$
|
|
NT$
|
|
US$
|
Basic earnings per common share
|
|
|
|
|
|
|
|
|
Historical of ASE
|
|
|
2.78
|
|
|
|
0.09
|
|
|
|
2.16
|
|
|
|
0.07
|
|
Historical of SPIL
|
|
|
3.15
|
|
|
|
0.10
|
|
|
|
1.87
|
|
|
|
0.06
|
|
Pro forma combined of HoldCo
|
|
|
5.96
|
|
|
|
0.20
|
|
|
|
4.32
|
|
|
|
0.14
|
|
Diluted earnings per common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Historical of ASE
|
|
|
2.33
|
|
|
|
0.08
|
|
|
|
1.98
|
|
|
|
0.07
|
|
Historical of SPIL
|
|
|
2.65
|
|
|
|
0.09
|
|
|
|
1.46
|
|
|
|
0.05
|
|
Pro forma combined of HoldCo
|
|
|
5.39
|
|
|
|
0.18
|
|
|
|
4.32
|
|
|
|
0.14
|
|
Basic earnings per ADS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Historical of ASE
|
|
|
13.91
|
|
|
|
0.46
|
|
|
|
10.81
|
|
|
|
0.36
|
|
Historical of SPIL
|
|
|
15.73
|
|
|
|
0.52
|
|
|
|
9.35
|
|
|
|
0.31
|
|
Pro forma combined of HoldCo
|
|
|
29.78
|
|
|
|
0.98
|
|
|
|
21.61
|
|
|
|
0.71
|
|
Diluted earnings per ADS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Historical of ASE
|
|
|
11.64
|
|
|
|
0.38
|
|
|
|
9.88
|
|
|
|
0.33
|
|
Historical of SPIL
|
|
|
13.23
|
|
|
|
0.44
|
|
|
|
7.30
|
|
|
|
0.24
|
|
Pro forma combined of HoldCo
|
|
|
26.96
|
|
|
|
0.89
|
|
|
|
21.61
|
|
|
|
0.71
|
|
Dividends per common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Historical of ASE
|
|
|
1.60
|
|
|
|
0.05
|
|
|
|
1.40
|
|
|
|
0.05
|
|
Historical of SPIL
|
|
|
2.80
|
|
|
|
0.09
|
|
|
|
1.75
|
|
|
|
0.06
|
|
Pro forma combined of HoldCo
|
|
|
**
|
|
|
|
**
|
|
|
|
**
|
|
|
|
**
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
of September 30, 2017
|
|
|
NT$
|
|
US$
|
Book value per common share at period end
|
|
|
|
|
Historical of ASE
|
|
21.87
|
|
0.72
|
Historical of SPIL
|
|
21.36
|
|
0.70
|
Pro forma combined of HoldCo
|
|
45.46
|
|
1.5
|
Book value per ADS at period end
|
|
|
|
|
Historical of ASE
|
|
109.36
|
|
3.61
|
Historical of SPIL
|
|
106.81
|
|
3.52
|
Pro forma combined of HoldCo
|
|
227.32
|
|
7.49
|
Unaudited
Pro Forma Condensed Financial Statements
The following sets forth the unaudited
pro forma condensed combined financial statements of HoldCo after giving effect to the Share Exchange and assumed borrowing of
NT$95,000.0 million (US$3,132.2 million) and utilization of the existing cash of NT$11,441.0 million (US$377.2 million) to fund
the acquisition as described below in Notes 1 and 5 to Pro Forma Assumptions and Adjustments. The “Unaudited Pro Forma Condensed
Combined Statements of Operations”, which we refer to in this proxy statement/prospectus as the Pro Forma Statements of
Operations, give effect to the Share Exchange as if ASE’s initial acquisitions of SPIL’s 33.29% shareholding and the
subsequent acquisition of SPIL’s 66.71% shareholding which constitute acquisitions of 100% shareholding of SPIL had occurred
on January 1, 2016. The “Unaudited Pro Forma Condensed Combined Balance Sheet” gives effect to the Share Exchange
as if it had been completed on September 30, 2017. The Pro Forma Statements of Operations for the year ended December 31, 2016
combines the results of operations of ASE and SPIL for the year ended December 31, 2016. The Pro Forma Statement of Operations
for the nine months ended September 30, 2017 combines the results of operations of ASE and SPIL for the nine months ended September
30, 2017. The historical consolidated financial information has been adjusted in the unaudited pro forma condensed combined financial
statements to reflect the pro forma impact of events that are directly attributable to the transactions contemplated by the Joint
Share Exchange Agreement, factually supportable and, with respect to the Pro Forma Statements of Operations, are expected to have
a continuing impact on the combined results.
The unaudited pro forma condensed combined
financial statements have been prepared under IFRS for (i) the Share Exchange of ASE will be accounted as a legal reorganization
of entities under common control and all assets and liabilities of ASE will be recorded on the books of HoldCo at the predecessor
carrying amounts; (ii) the cash consideration paid by HoldCo pursuant to the Share Exchange in respect of SPIL will be accounted
for by applying the acquisition method of accounting with ASE treated as the accounting acquirer and SPIL treated as the acquired
company for financial reporting purposes. The acquisition method of accounting is dependent upon certain valuations and other
studies that are in progress. Accordingly, the pro forma adjustments are preliminary, have been made solely for the purpose of
preparing the unaudited pro forma condensed combined financial statements and are subject to revision based on a final determination
of fair value as of the date of acquisition. Differences between these preliminary estimates and the final acquisition accounting
may have a material impact on the accompanying unaudited pro forma condensed combined financial statements and HoldCo’s
future results of operations and financial position.
The unaudited pro forma condensed combined
financial statements do not reflect any cost savings or associated costs to achieve such savings from operating efficiencies,
synergies, debt refinancing or other restructuring that may result from the Share Exchange. The unaudited pro forma condensed
combined financial statements are not necessarily indicative of the operating results or financial position that would have occurred
if the Share Exchange had been completed on the dates assumed, nor are they necessarily indicative of the future operating results
or financial position of the combined company. In addition, the unaudited pro forma condensed combined financial statements include
adjustments which are preliminary and may be revised. There can be no assurance that such revisions will not result in material
changes to the information presented.
The unaudited pro forma condensed combined
financial statements have been derived from and should be read in conjunction with the consolidated financial statements and the
accompanying notes of ASE and SPIL included in their respective annual reports on Form 20-F and interim reports on Form 6-K, incorporated
herein by reference.
ASE Industrial Holding Co., Ltd.
Unaudited Pro Forma Condensed Combined Statement of Operations
For the year ended December 31, 2016
|
|
ASE
|
|
SPIL
|
|
Pro
Forma Adjustment
|
|
Notes
|
|
Pro
Forma Results
|
|
|
NT$
(Retrospectively Adjusted)
|
|
US$
(Retrospec-tively Adjusted)
|
|
NT$
|
|
US$
|
|
NT$
|
|
US$
|
|
|
|
NT$
|
|
US$
|
|
|
(in millions, except per
share data)
|
Operating revenues
|
|
|
274,884.1
|
|
|
|
9,063.1
|
|
|
|
85,111.9
|
|
|
|
2,806.2
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
359,996.0
|
|
|
|
11,869.3
|
|
Operating
costs
|
|
|
(221,696.9
|
)
|
|
|
(7,309.5
|
)
|
|
|
(65,762.2
|
)
|
|
|
(2,168.2
|
)
|
|
|
(3,625.0
|
)
|
|
|
(119.5
|
)
|
|
|
5(a)
|
|
|
(291,084.1
|
)
|
|
|
(9,597.2
|
)
|
Gross
profit
|
|
|
53,187.2
|
|
|
|
1,753.6
|
|
|
|
19,349.7
|
|
|
|
638.0
|
|
|
|
(3,625.0
|
)
|
|
|
(119.5
|
)
|
|
|
|
|
|
|
68,911.9
|
|
|
|
2,272.1
|
|
Operating expenses
|
|
|
(26,526.8
|
)
|
|
|
(874.6
|
)
|
|
|
(8,563.6
|
)
|
|
|
(282.3
|
)
|
|
|
(418.2
|
)
|
|
|
(13.8
|
)
|
|
|
5(b)
|
|
|
(35,508.6
|
)
|
|
|
(1,170.7
|
)
|
Other
operating income and expenses, net
|
|
|
(800.3
|
)
|
|
|
(26.4
|
)
|
|
|
(117.0
|
)
|
|
|
(3.9
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
(917.3
|
)
|
|
|
(30.3
|
)
|
Profit from operations
|
|
|
25,860.1
|
|
|
|
852.6
|
|
|
|
10,669.1
|
|
|
|
351.8
|
|
|
|
(4,043.2
|
)
|
|
|
(133.3
|
)
|
|
|
|
|
|
|
32,486.0
|
|
|
|
1,071.1
|
|
Non-operating
income (expense), net
|
|
|
2,108.6
|
|
|
|
69.5
|
|
|
|
1,005.0
|
|
|
|
33.1
|
|
|
|
(3,452.3
|
)
|
|
|
(113.8
|
)
|
|
|
5(c)
|
|
|
(338.7
|
)
|
|
|
(11.2
|
)
|
Profit before income
tax
|
|
|
27,968.7
|
|
|
|
922.1
|
|
|
|
11,674.1
|
|
|
|
384.9
|
|
|
|
(7,495.5
|
)
|
|
|
(247.1
|
)
|
|
|
|
|
|
|
32,147.3
|
|
|
|
1,059.9
|
|
Income
tax expense
|
|
|
(5,390.8
|
)
|
|
|
(177.7
|
)
|
|
|
(1,867.2
|
)
|
|
|
(61.6
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
(7,258.0
|
)
|
|
|
(239.3
|
)
|
Profit
|
|
|
22,577.9
|
|
|
|
744.4
|
|
|
|
9,806.9
|
|
|
|
323.3
|
|
|
|
(7,495.5
|
)
|
|
|
(247.1
|
)
|
|
|
|
|
|
|
24,889.3
|
|
|
|
820.6
|
|
Profit
attributable to non-controlling interests
|
|
|
(1,253.5
|
)
|
|
|
(41.3
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
(1,253.5
|
)
|
|
|
(41.3
|
)
|
Profit
attributable to the parent company
|
|
|
21,324.4
|
|
|
|
703.1
|
|
|
|
9,806.9
|
|
|
|
323.3
|
|
|
|
(7,495.5
|
)
|
|
|
(247.1
|
)
|
|
|
|
|
|
|
23,635.8
|
|
|
|
779.3
|
|
Shares used in
computing earnings per common share (in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
7,662.9
|
|
|
|
7,662.9
|
|
|
|
3,116.4
|
|
|
|
3,116.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,968.2
|
|
|
|
3,968.2
|
|
Diluted
|
|
|
8,284.1
|
|
|
|
8,284.1
|
|
|
|
3,410.7
|
|
|
|
3,410.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,968.2
|
|
|
|
3,968.2
|
|
Earnings per common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
2.78
|
|
|
|
0.09
|
|
|
|
3.15
|
|
|
|
0.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.96
|
|
|
|
0.20
|
|
Diluted
|
|
|
2.33
|
|
|
|
0.08
|
|
|
|
2.65
|
|
|
|
0.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.39
|
|
|
|
0.18
|
|
The accompanying notes are an integral
part of these unaudited pro forma condensed combined financial statements.
For the nine months ended September
30, 2017
|
|
ASE
|
|
SPIL
|
|
Pro
Forma Adjustment
|
|
Notes
|
|
Pro
Forma Results
|
|
|
NT$
|
|
US$
|
|
NT$
|
|
US$
|
|
NT$
|
|
US$
|
|
|
|
NT$
|
|
US$
|
|
|
(in millions,
except per share data)
|
Operating revenues
|
|
|
206,455.1
|
|
|
|
6,806.9
|
|
|
|
61,931.6
|
|
|
|
2,041.9
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
268,386.7
|
|
|
|
8,848.8
|
|
Operating costs
|
|
|
(168,516.6
|
)
|
|
|
(5,556.1
|
)
|
|
|
(49,602.7
|
)
|
|
|
(1,635.4
|
)
|
|
|
(2,718.8
|
)
|
|
|
(89.7
|
)
|
|
|
5(d)
|
|
|
(220,838.1
|
)
|
|
|
(7,281.2
|
)
|
Gross profit
|
|
|
37,938.5
|
|
|
|
1,250.8
|
|
|
|
12,328.9
|
|
|
|
406.5
|
|
|
|
(2,718.8
|
)
|
|
|
(89.7
|
)
|
|
|
|
|
|
|
47,548.6
|
|
|
|
1,567.6
|
|
Operating expenses
|
|
|
(20,426.6
|
)
|
|
|
(673.4
|
)
|
|
|
(5,973.7
|
)
|
|
|
(197.0
|
)
|
|
|
(279.3
|
)
|
|
|
(9.2
|
)
|
|
|
5(e)
|
|
|
(26,679.6
|
)
|
|
|
(879.6
|
)
|
Other operating income and
expenses, net
|
|
|
274.3
|
|
|
|
9.0
|
|
|
|
36.5
|
|
|
|
1.2
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
310.8
|
|
|
|
10.2
|
|
Profit from operations
|
|
|
17,786.2
|
|
|
|
586.4
|
|
|
|
6,391.7
|
|
|
|
210.7
|
|
|
|
(2,998.1
|
)
|
|
|
(98.9
|
)
|
|
|
|
|
|
|
21,179.8
|
|
|
|
698.2
|
|
Non-operating income (expense),
net
|
|
|
5,401.3
|
|
|
|
178.1
|
|
|
|
373.9
|
|
|
|
12.4
|
|
|
|
(2,121.6
|
)
|
|
|
(70.0
|
)
|
|
|
5(f)
|
|
|
3,653.6
|
|
|
|
120.5
|
|
Profit before income tax
|
|
|
23,187.5
|
|
|
|
764.5
|
|
|
|
6,765.6
|
|
|
|
223.1
|
|
|
|
(5,119.7
|
)
|
|
|
(168.9
|
)
|
|
|
|
|
|
|
24,833.4
|
|
|
|
818.7
|
|
Income tax expense
|
|
|
(4,638.0
|
)
|
|
|
(152.9
|
)
|
|
|
(949.2
|
)
|
|
|
(31.3
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
(5,587.2
|
)
|
|
|
(184.2
|
)
|
Profit
|
|
|
18,549.5
|
|
|
|
611.6
|
|
|
|
5,816.4
|
|
|
|
191.8
|
|
|
|
(5,119.7
|
)
|
|
|
(168.9
|
)
|
|
|
|
|
|
|
19,246.2
|
|
|
|
634.5
|
|
Profit attributable to non-controlling
interests
|
|
|
(1,134.6
|
)
|
|
|
(37.4
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
(1,134.6
|
)
|
|
|
(37.4
|
)
|
Profit attributable to
the parent company
|
|
|
17,414.9
|
|
|
|
574.2
|
|
|
|
5,816.4
|
|
|
|
191.8
|
|
|
|
(5,119.7
|
)
|
|
|
(168.9
|
)
|
|
|
|
|
|
|
18,111.6
|
|
|
|
597.1
|
|
Shares used in computing earnings per common share
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
8,057.6
|
|
|
|
8,057.6
|
|
|
|
3,116.4
|
|
|
|
3,116.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,190.2
|
|
|
|
4,190.2
|
|
Diluted
|
|
|
8,266.1
|
|
|
|
8,266.1
|
|
|
|
3,412.0
|
|
|
|
3,412.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,190.2
|
|
|
|
4,190.2
|
|
Earnings per common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
2.16
|
|
|
|
0.07
|
|
|
|
1.87
|
|
|
|
0.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.32
|
|
|
|
0.14
|
|
Diluted
|
|
|
1.98
|
|
|
|
0.07
|
|
|
|
1.46
|
|
|
|
0.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.32
|
|
|
|
0.14
|
The accompanying notes are an integral
part of these unaudited pro forma condensed combined financial statements.
ASE Industrial Holding Co., Ltd.
Unaudited Pro Forma Condensed Combined Balance Sheet as of September 30, 2017
|
|
ASE
|
|
SPIL
|
|
Pro
Forma Adjustment
|
|
Notes
|
|
Pro
Forma Results
|
|
|
NT$
|
|
US$
|
|
NT$
|
|
US$
|
|
NT$
|
|
US$
|
|
|
|
NT$
|
|
US$
|
|
|
(in millions)
|
Current
assets
|
|
|
139,912.2
|
|
|
|
4,613.0
|
|
|
|
46,610.1
|
|
|
|
1,536.8
|
|
|
|
(11,447.9
|
)
|
|
|
(377.5
|
)
|
|
|
4
|
|
|
175,074.4
|
|
|
|
5,772.3
|
|
Investments
- non-current
|
|
|
50,038.2
|
|
|
|
1,649.8
|
|
|
|
7,582.6
|
|
|
|
250.0
|
|
|
|
(45,898.2
|
)
|
|
|
(1,513.3
|
)
|
|
|
5(g)
|
|
|
11,722.6
|
|
|
|
386.5
|
|
Property,
plant and equipment, net
|
|
|
136,982.0
|
|
|
|
4,516.4
|
|
|
|
64,789.6
|
|
|
|
2,136.2
|
|
|
|
11,365.7
|
|
|
|
374.7
|
|
|
|
2
|
|
|
213,137.3
|
|
|
|
7,027.3
|
|
Intangible
assets
|
|
|
11,830.1
|
|
|
|
390.0
|
|
|
|
123.5
|
|
|
|
4.1
|
|
|
|
80,435.3
|
|
|
|
2,652.0
|
|
|
|
2
|
|
|
92,388.9
|
|
|
|
3,046.1
|
|
Others
|
|
|
21,333.1
|
|
|
|
703.4
|
|
|
|
1,884.9
|
|
|
|
62.1
|
|
|
|
1,182.3
|
|
|
|
39.0
|
|
|
|
2
|
|
|
24,400.3
|
|
|
|
804.5
|
|
Total
assets
|
|
|
360,095.6
|
|
|
|
11,872.6
|
|
|
|
120,990.7
|
|
|
|
3,989.2
|
|
|
|
35,637.2
|
|
|
|
1,174.9
|
|
|
|
|
|
|
|
516,723.5
|
|
|
|
17,036.7
|
|
Short-term
debts
|
|
|
19,638.4
|
|
|
|
647.5
|
|
|
|
3,479.9
|
|
|
|
114.7
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
23,118.3
|
|
|
|
762.2
|
|
Current
portion of long-term debts
|
|
|
13,018.6
|
|
|
|
429.2
|
|
|
|
14,651.6
|
|
|
|
483.1
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
27,670.2
|
|
|
|
912.3
|
|
Long-term
debts
|
|
|
49,888.8
|
|
|
|
1,644.9
|
|
|
|
13,753.3
|
|
|
|
453.5
|
|
|
|
95,000.0
|
|
|
|
3,132.1
|
|
|
|
5(h)
|
|
|
158,642.1
|
|
|
|
5,230.5
|
|
Other
liabilities
|
|
|
81,453.1
|
|
|
|
2,685.6
|
|
|
|
22,531.5
|
|
|
|
742.9
|
|
|
|
15.7
|
|
|
|
0.5
|
|
|
|
3
|
|
|
104,000.3
|
|
|
|
3,429.0
|
|
Total
liabilities
|
|
|
163,998.9
|
|
|
|
5,407.2
|
|
|
|
54,416.3
|
|
|
|
1,794.2
|
|
|
|
95,015.7
|
|
|
|
3,132.6
|
|
|
|
|
|
|
313,430.9
|
|
|
|
10,334.0
|
|
Outstanding share
capital
|
|
|
83,804.8
|
|
|
|
2,763.1
|
|
|
|
31,163.6
|
|
|
|
1,027.5
|
|
|
|
(73,066.0
|
)
|
|
|
(2,409.0
|
)
|
|
|
5(i)
|
|
|
41,902.4
|
|
|
|
1,381.6
|
|
Other
equity attributable to owners of the Company
|
|
|
99,501.1
|
|
|
|
3,280.6
|
|
|
|
35,410.8
|
|
|
|
1,167.5
|
|
|
|
13,687.5
|
|
|
|
451.3
|
|
|
|
5(i)
|
|
|
148,599.4
|
|
|
|
4,899.4
|
|
Non-controlling
interests
|
|
|
12,790.8
|
|
|
|
421.7
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
12,790.8
|
|
|
|
421.7
|
|
Total
equity
|
|
|
196,096.7
|
|
|
|
6,465.4
|
|
|
|
66,574.4
|
|
|
|
2,195.0
|
|
|
|
(59,378.5
|
)
|
|
|
(1,957.7
|
)
|
|
|
|
|
|
|
203,292.6
|
|
|
|
6,702.7
|
|
Total
liabilities and stockholders’ equity
|
|
|
360,095.6
|
|
|
|
11,872.6
|
|
|
|
120,990.7
|
|
|
|
3,989.2
|
|
|
|
35,637.2
|
|
|
|
1,174.9
|
|
|
|
|
|
|
|
516,723.5
|
|
|
|
17,036.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral
part of these unaudited pro forma condensed combined financial statements.
NOTES TO PRO FORMA ASSUMPTIONS AND
ADJUSTMENTS
|
1.
|
Total Share Exchange consideration and financing structure
|
On June 30, 2016, ASE and SPIL entered
into a Joint Share Exchange Agreement pursuant to which HoldCo will be formed by means of a statutory share exchange pursuant to
the laws of the Republic of China, and HoldCo will (i) acquire all issued shares of ASE in exchange for shares of HoldCo using
the Exchange Ratio, whereby ASE shareholders will receive 0.5 HoldCo Common Shares for each ASE Common Share they hold as described
elsewhere in this document, and (ii) acquire all issued shares of SPIL using the Cash Consideration as described below. Upon the
consummation of the Share Exchange, ASE and SPIL will become wholly owned subsidiaries of HoldCo concurrently. Subject to the Share
Exchange and the Joint Share Exchange Agreement being approved by shareholders of ASE and SPIL, and upon the satisfaction of the
other conditions for completing the Share Exchange, HoldCo will be formed and the Share Exchange is expected to become effective.
HoldCo was assumed to issue 4,190,239,051
common shares at NT$10 par value (or share capital of NT$41,902.4 million) to ASE shareholders based on the number of issued shares
of ASE on September 30, 2017. The estimated cash consideration paid to SPIL shareholders was NT$159,557.7 million based on the
number of issued shares of SPIL on September 30, 2017 at NT$51.2 per share, whereby NT$55 per share has been adjusted to NT$51.2
after excluding the cash dividend distribution and a return of capital reserve of NT$3.8 per SPIL Common Share distributed by
SPIL on July 1, 2016.
The Cash Consideration will be subject
to adjustments if SPIL issues shares or pays cash dividends during the period from the execution date of the Joint Share Exchange
Agreement to the Effective Time; provided, however, that the Cash Consideration shall not be subject to adjustment if the aggregate
amount of the cash dividends distributed by SPIL in fiscal year 2017 is less than 85% of its after-tax net profit for fiscal year
2016. In fiscal year 2017, SPIL made a dividend distribution of NT$1.75 per share to its shareholder, which represented 55% of
its after-tax net profit for fiscal year 2016. Therefore, no adjustments were made to the Cash Consideration.
Since ASE currently owns 33.29% shareholding
of SPIL, for the purpose of presenting the accompanying pro forma combined balance sheet as of September 30, 2017, the cash consideration
of NT$106,441.0 million (US$3,509.4 million), which represented the amount to acquire the remaining 66.71% shareholding, was assumed
to be funded by NT$11,441.0 million (US$377.2 million) from ASE’s existing cash and NT$95,000.0 million (US$3,132.2
million) financed from banks recorded as long-term debts. For the purpose of presenting the accompany pro forma combined statements
of operations, it was assumed that ASE’s initial acquisition of SPIL’s 33.29% shareholding and the subsequent acquisition
of SPIL’s 66.71% shareholding, which together constitute the acquisition of 100% of the shareholding of SPIL, had occurred
on January 1, 2016.
|
2.
|
Preliminary estimated purchase price allocation
|
The pro forma combined financial statements
reflect the following estimated acquisition-date fair value of tangible assets, liabilities, and other intangible assets of SPIL.
|
|
Book Value
|
|
Fair Value
Adjustments
|
|
Fair Value
|
|
|
(in NT$ millions)
|
Current assets
|
|
|
46,610.1
|
|
|
|
–
|
|
|
|
46,610.1
|
|
Investments - non-current
|
|
|
7,582.6
|
|
|
|
–
|
|
|
|
7,582.6
|
|
Property, plant and equipment, net
|
|
|
64,789.6
|
|
|
|
11,365.7
|
|
|
|
76,155.3
|
|
Intangible assets
|
|
|
123.5
|
|
|
|
26,300.0
|
|
|
|
26,423.5
|
|
Goodwill
|
|
|
–
|
|
|
|
54,135.3
|
|
|
|
54,135.3
|
|
Other non-current assets
|
|
|
1,884.9
|
|
|
|
1,182.3
|
|
|
|
3,067.2
|
|
Short-term debts
|
|
|
3,479.9
|
|
|
|
–
|
|
|
|
3,479.9
|
|
Current portion of long-term debts
|
|
|
14,651.6
|
|
|
|
–
|
|
|
|
14,651.6
|
|
Long-term debts
|
|
|
13,753.3
|
|
|
|
–
|
|
|
|
13,753.3
|
|
Other liabilities
|
|
|
22,531.5
|
|
|
|
–
|
|
|
|
22,531.5
|
|
Total estimated purchase price consideration
|
|
|
66,574.4
|
|
|
|
92,983.3
|
|
|
|
159,557.7
|
|
Purchased property, plant and equipment
and identified intangible assets are being depreciated or amortized on a straight-line basis over its weighted-average remaining
useful life of approximately ten years.
The estimated fair values and useful lives
of assets acquired and liabilities assumed are based on preliminary management estimates and are subject to final valuation adjustments,
which may cause some of the amounts ultimately recorded as goodwill to be materially different from those shown on the unaudited
pro forma condensed consolidated balance sheets. The acquisition accounting is dependent upon certain valuations and other studies
that have yet to progress to a stage where there is sufficient information for definitive measurement. HoldCo intends to complete
the valuations and other studies no later than a one-year measurement period following the Effective Time in accordance with IFRS.
For the purposes of this unaudited
pro forma financial information, it has been assumed that the fair value evaluation was performed at the Effective Time, September
30, 2017, and the related assumption or calculation was as below.
|
(i)
|
Property, plant and equipment, net:
|
The fair value adjustment
of property, plant and equipment is NT$11,365.7 million (US$374.7 million).
The weighted-average remaining
useful life of property, plant and equipment is approximately 10 years, and the estimated depreciation is NT$1,657.1 million (US$54.6
million) and NT$1,242.9 million (US$41.0 million) reflected as a pro forma adjustment under operating costs in the Pro Forma Statements
of Operations for the year ended December 31, 2016 and for the nine months ended September 30, 2017, respectively. The actual
depreciation may differ significantly between periods based upon the final value assigned and the depreciation period used for
property, plant and equipment.
For purposes of these Pro
Forma Financial Statements, preliminary identifiable intangible assets consist of an estimated NT$7,800.0 million (US$257.2 million)
for customer relationships and NT$18,500.0 million (US$610.0 million) for patented technology. These identifiable intangible assets
are finite-lived intangible assets with useful life of 10 years.
The estimated amortization
related to these intangible assets is NT$1,947.3 million (US$64.2 million) and NT$795.9 million (US$26.2 million) reflected as
a pro forma adjustment under operating costs and operating expenses in the Pro Forma Statement of Operations for the year ended
December 31, 2016, respectively, and NT$1,460.5 million (US$48.2 million) and NT$596.9 million (US$19.7 million) as a pro forma
adjustment under operating costs and operating expenses in the Pro Forma Statement of Operations for the nine months ended September
30, 2017, respectively. The actual amortization may differ significantly between periods based upon the final value assigned and
the amortization period used for each identifiable intangible asset.
Goodwill is calculated as the
difference between the acquisition date fair value of the consideration expected to be transferred and the values assigned to the
assets acquired and liabilities assumed.
|
(iv)
|
Other non-current assets:
|
The fair value adjustment
of land use rights is NT$1,182.3 million (US$39.0 million). The remaining useful life of land use right years are approximately
50 years, and the estimated amortization is NT$20.6
million
(US$0.7 million) and NT$15.4 million (US$0.5 million) reflected as a pro forma adjustment under operating costs in the Pro Forma
Statements of Operations for the year ended December 31, 2016 and for the nine months ended September 30, 2017, respectively.
|
3.
|
SPIL Acquisition and Share Exchange cost
|
Total costs related to the SPIL acquisition
and the Share Exchange cost are estimated at approximately NT$806.4 million, including (1) NT$95.4 million and NT$377.7 million
incurred during the year ended December 31, 2015 and 2016, respectively, and NT$317.6 million incurred during the nine months ended
September 30, 2017, and (2) NT$15.7 million that have not yet incurred as of September 30, 2017. Such costs include financial,
accounting, legal and other consulting fees associated until the completion of the Share Exchange. The costs of NT$15.7 million
(US$0.5 million) not incurred as of September 30, 2017 has been reflected as a pro forma adjustment to retained earnings and other
liabilities on the unaudited pro forma condensed consolidated balance sheets as of September 30, 2017.
Interest expense in the Pro Forma Statements
of Operations for the year ended December 31, 2016 and for the nine months ended September 30, 2017 has been adjusted as follows
based on the expected sources of funding described as follows:
|
|
Principal from January 1,
2016 to September 30, 2017
|
|
Effective Interest Rate
|
|
Interest Expense for the
Year Ended December 31, 2016 Pro Forma Statement of Operations
|
|
Interest Expense for the
Nine Months Ended September 30, 2017 Pro Forma Statement of Operations
|
|
|
|
(in NT$ million,
except for percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debts
|
|
|
95,000
|
|
|
|
1.82%
|
|
|
|
1,727.3
|
|
|
|
1,295.6
|
|
The cash consideration of NT$106,441.0
million to acquire the remaining 66.71% shareholding of SPIL as described in Note 1 above was assumed to be funded by NT$11,441.0
million from ASE’s existing cash and NT$95,000.0 million financed from banks. For the purposes of calculating the pro forma
interest expense, it was assumed that the bank loan of NT$95,000 million was fully drawn-down by HoldCo on January 1, 2016. The
floating borrowing rate was assumed to be based on a 1.82 % interest rate for the time span of the bank loan period for interest
expense calculation. However, the final bank loan interest rate may differ from the rates in place when actually drawdown.
For the purposes of calculating the
above interest expense, the effective interest rate also includes coordination and arrangement fees. A hypothetical change in
interest rates of 0.125% would increase or decrease total interest expense of the Pro Forma Statements of Operations by approximately
NT$118.8 million (US$3.9 million) and NT$89.1 million (US$2.9 million) for the year ended December 31, 2016 and for the nine months
ended September 30, 2017, respectively.
For the purposes of this unaudited pro
forma financial information, it has been assumed that the interest expense on the debt financing incurred to fund the Share Exchange
will not be deductible for tax purposes. This assumption may be subject to change and may not be reflective of the deductions that
will be available in future periods after completion of the Share Exchange.
|
(a)
|
Adjustment to recognize depreciation and amortization of the
fair value adjustment on property, plant and equipment, patented technology and other
noncurrent assets of NT$3,625.0 million (US$119.5 million) as described in Note 2 (i)
(ii) (iv) above.
|
|
(b)
|
Adjustment to recognize amortization of fair value adjustment
on customer relationships of NT$795.9 million (US$26.2 million) as described in Note
2 (ii) above and to reverse of the incurred consulting fee related to the acquisition
of SPIL as an equity method investment of NT$377.7 million (US$12.4 million).
|
|
(c)
|
Adjustment to (i) remove ASE’s share of profit of equity
method associates in SPIL of NT$1,725.0 million (US$56.8 million) and (ii) accrue the
interest expense of NT$1,727.3 million (US$57.0 million) as described in Note 4 above.
|
|
(d)
|
Adjustment to recognize depreciation and amortization of the
fair value adjustment on property, plant and equipment, patented technology and other
noncurrent assets of NT$2,718.8 million (US$89.7 million) as described in Note 2 (i)
(ii) (iv).
|
|
(e)
|
Adjustment to recognize amortization of fair value adjustment
on customer relationships of NT$596.9 million (US$19.7 million) as described in Note
2 (ii) above and to reverse the incurred consulting fee related to the acquisition of
SPIL as equity method investment of NT$317.6 million (US$10.5 million).
|
|
(f)
|
Adjustment to (i) remove ASE’s share of profit of equity
method associates in SPIL of NT$826.0 million (US$27.2 million) and (ii) accrue the interest
expense of NT$1,295.6 million (US$42.8 million) as described in Note 4 above.
|
|
(g)
|
Adjustment to remove ASE’s investments accounted for
using the equity method in SPIL as of September 30, 2017 under the assumption that HoldCo
acquired a 100% shareholding in SPIL as of September 30, 2017.
|
|
(h)
|
Adjustment to reflect the assumed HoldCo’s borrowing
for the cash consideration of SPIL in the amount of NT$95,000 million (US$3,132.1 million)
as described in Note 4 above.
|
|
(i)
|
Adjustment to common shares and additional paid in capital
in exchange for ASE Common Shares with HoldCo Common Shares using the share exchange
ratio as described in Note 1 above and adjust the effect of derecognizing investment
of equity method associate of SPIL as of September 30, 2017 to other equity under the
assumption that HoldCo acquired 100% shareholding of SPIL as of September 30, 2017.
|
Special
Factors
Effects of the Share Exchange
Upon the terms and subject to the conditions
of the Joint Share Exchange Agreement, and in accordance with the applicable provisions of the ROC Company Law, at the Effective
Time, HoldCo will acquire all issued shares of ASE and SPIL, and ASE and SPIL will become wholly owned subsidiaries of HoldCo concurrently.
The following chart depicts the organizational
structure of each of ASE and SPIL before the Share Exchange as of the date of this proxy statement/prospectus and immediately after
the Effective Time.
Before the Share Exchange as of the date
of this proxy statement/prospectus:
Immediately after the Effective Time:
Pursuant to the terms and subject to the
conditions set forth in the Joint Share Exchange Agreement, at the Effective Time:
|
(i)
|
for SPIL shareholders:
|
|
·
|
each SPIL
Common Share, par value NT$10 per share, issued immediately prior to the Effective Time
(including SPIL’s treasury shares and the SPIL Common Shares beneficially owned
by ASE), will be transferred to HoldCo in consideration for the right to receive NT$51.2
(representing NT$55
minus
a cash dividend and a return of capital reserve of NT$3.8
per SPIL Common Share distributed by SPIL on July 1, 2016), payable
by HoldCo in cash in NT dollars, without interest and net of any applicable withholding
taxes; and
|
|
·
|
each
SPIL ADS will be cancelled in exchange for the right to receive through SPIL Depositary, the US dollar equivalent of NT$256 (representing
five times of the SPIL Common Shares Cash Consideration)
minus
(i) all processing fees and expenses per SPIL ADS in relation
to the conversion from NT dollars into US dollars, and (ii) US$0.05 per SPIL ADS cancellation fees pursuant to the terms of the
SPIL Deposit Agreement, payable in cash in US dollars, without interest and net of any applicable withholding taxes. Within
three ROC business days after the Effective Time, SPIL Depositary will receive the aggregate amount of SPIL ADS Cash
Consideration in NT dollars for all issued SPIL ADSs through SPIL’s share registrar. SPIL ADS Holders of record will
receive the SPIL ADS Cash Consideration through SPIL Depositary upon surrendering their SPIL ADSs for cancellation to SPIL
Depositary after the Effective Time.
|
At the Effective Time, HoldCo will
acquire all issued shares of SPIL, and therefore HoldCo would be entitled to all benefits resulting from its 100% ownership of
SPIL, including all of SPIL’s net book value and net income or loss. Similarly, HoldCo would also bear all of the risk of
losses generated by SPIL’s operations and any decrease in the value of SPIL after the Share Exchange. Upon consummation
of the Share Exchange, SPIL would become a wholly owned subsidiary of HoldCo. Accordingly, former SPIL shareholders would not
have the opportunity to participate in the earnings and growth of SPIL after the Share Exchange and would not have any right to
vote on corporate matters. Similarly, former SPIL shareholders would not face the risk of losses generated by SPIL’s operations
or decline in the value of SPIL after the Share Exchange. Further, the SPIL Common Shares would be delisted from the TWSE and
SPIL ADSs would be delisted from NASDAQ and would become eligible for deregistration under the Exchange Act.
|
(ii)
|
for ASE shareholders:
|
|
·
|
each
ASE Common Share, par value NT$10 per share, issued immediately prior to the Effective
Time (including ASE’s treasury shares), will be transferred to HoldCo in consideration for the right to receive 0.5 HoldCo
Common Shares; and
|
|
·
|
each ASE ADS, currently representing five ASE Common Shares, will, after the Effective Time, represent the right to receive
1.25 HoldCo ADSs, each HoldCo ADS representing two HoldCo Common Shares, upon surrender for cancellation to the ASE Depositary
after the Effective Time.
|
Under ROC law, if any fractional HoldCo
Common Shares representing less than one common share would otherwise be allotted to former holders of ASE Common Shares in connection
with the Share Exchange, those fractional shares will not be issued to those shareholders. Pursuant to the Joint Share Exchange
Agreement, ASE will aggregate the fractional entitlements and sell the aggregated ASE Common Shares using the closing price of
ASE Common Shares on the TWSE on the ninth (9th) ROC Trading Day prior to the Effective Time, to an appointee of the Chairman of
HoldCo. The cash proceeds from the sale will be distributed to the former holders of ASE Common Shares by HoldCo on a proportionate
basis in accordance with their respective fractions at the Effective Time. Under ROC law, ASE Common Shares and HoldCo Common Shares
will be recorded in book-entry by the Taiwan Depository & Clearing Corporation. The HoldCo Common Shares entitlements as a
result of the Share Exchange will be automatically recorded at ASE shareholders’ Taiwan Depository & Clearing Corporation
account at the Effective Time of the Share Exchange, with no need for any additional action on ASE shareholders’ part.
Under the ASE Deposit Agreement, the ASE
Depositary (Citibank) will only distribute whole HoldCo ADSs. The ASE Depositary will use commercially reasonable efforts to sell
the fractional entitlements to HoldCo ADSs in the open market and will distribute the net cash proceeds to the holders of ASE ADSs
entitled to it. After the Share Exchange becomes effective, the ASE Depositary will send a notice to all holders of ASE ADSs which
specifies the manner in which ASE ADSs may be delivered to the ASE Depositary in exchange for HoldCo ADSs. A holder of ASE ADSs
who delivers those ASE ADSs in the manner required will receive in exchange the applicable whole number of HoldCo ADSs. There is
a US$0.02 cancellation fee per ASE ADS held, payable by holders of ASE ADSs, to the ASE Depositary in connection with the exchange
of ASE ADSs for HoldCo ADSs.
At the Effective Time, HoldCo will
acquire all issued shares of ASE. HoldCo would be entitled to all benefits resulting from its 100% ownership of ASE, including
all of ASE’s net book value and net income or loss. Similarly, HoldCo would also bear all of the risk of losses generated
by ASE’s operations and any decrease in the value of ASE after the Share Exchange. Upon consummation of the Share Exchange,
ASE would become a wholly owned subsidiary of HoldCo. ASE Common Shares would be delisted from the TWSE and ASE ADSs would be
delisted from NYSE and would become eligible for deregistration under the Exchange Act.
At the Effective Time, former ASE shareholders
will receive HoldCo Shares based on the Exchange Ratio. There are no material differences between the rights of holders of ASE
Common Shares and the rights of holders of HoldCo Common Shares from a legal perspective. For so long as HoldCo has a class of
securities (which include the HoldCo ADSs) listed on the NYSE, HoldCo will be subject to rules regarding corporate governance requirements
of NYSE and the Exchange Act, the reporting requirements for foreign private issuers, and the U.S. Sarbanes-Oxley Act of 2002 including,
for example, independence requirements for audit committee composition, annual certification requirements and auditor independence
rules, unless certain circumstances change. HoldCo will be required to disclose any significant ways in which its corporate governance
practices differ from those followed by U.S. domestic companies under NYSE’s listing standards. To the extent possible under
the ROC law and the arrangement contemplated by the HoldCo Deposit Agreement, HoldCo’s corporate governance practices are
expected to be comparable to those of ASE.
The issuance of HoldCo Common Shares
in connection with the Share Exchange to U.S. holders of ASE Common Shares has been registered under the Securities Act. Accordingly,
there will be no restrictions under the Securities Act upon the resale or transfer of such shares by U.S. shareholders of ASE
except for those shareholders, if any, who are deemed to be “affiliates” of ASE, as such term is used in Rule 144
under the Securities Act. Persons who may be deemed to be affiliates of ASE generally include individuals who, or entities that,
directly or indirectly control, or are controlled by or are under common control with, ASE. With respect to those shareholders
who may be deemed to be affiliates of ASE, Rule 144 places certain restrictions on the offer and sale within the United States
or to U.S. persons of HoldCo Common Shares that may be received by them pursuant to the Share Exchange. This proxy statement/prospectus
does not cover resales of shares of HoldCo Common Shares received by any person who may be deemed to be an affiliate of ASE.
Background of the Share Exchange; Past Contacts; Negotiations
Events leading to the execution of the
Joint Share Exchange Agreement described in this “Background of the Share Exchange; Past Contacts; Negotiations” section
occurred in various locations that regularly included Taiwan, United States and Hong Kong. As a result, Taiwan Standard Time is
used for all dates and times given.
The ASE Board and senior management of
ASE regularly review and assess ASE’s operations, performance, prospects and strategic direction. Prior to its announcement
of the Initial ASE Tender Offers in August 2015, ASE believed that in light of the increase in competition and the consolidation
trends in the global semiconductor industry, an investment in SPIL would present attractive opportunities. At that time, in ASE’s
view, the SPIL Common Shares and SPIL ADSs represented an attractive investment from a financial perspective. In addition, ASE
hoped that an investment in SPIL might facilitate future cooperation opportunities with SPIL, in a manner consistent with all applicable
laws, in an effort to maintain and promote the competitiveness of ASE.
On August 21, 2015, ASE announced that
it planned to commence, on August 24, 2015, the Initial ASE Tender Offers at a price of NT$45 per SPIL Common Share and NT$225
per SPIL ADS for 779,000,000 SPIL Common Shares (including those represented by SPIL ADSs), which represented approximately 24.99%
of the issued and outstanding share capital of SPIL.
On August 24, 2015, ASE commenced the Initial
ASE Tender Offers. On the same day, SPIL announced that it had formed a review committee consisting of its independent directors
to evaluate the Initial ASE Tender Offers.
On August 28, 2015, SPIL issued a press
release and filed a Solicitation/Recommendation Statement on Schedule 14D-9 (as amended, the “First Schedule 14D-9”)
with the SEC in which the SPIL Board recommended that SPIL shareholders reject the Initial ASE Tender Offers and not tender any
SPIL Common Shares or SPIL ADSs into the Initial ASE Tender Offers.
The First Schedule 14D-9 further disclosed
that, on August 28, 2015, SPIL had entered into a letter of intent with Hon Hai Precision Industry Co., Ltd. (“Hon Hai”)
pursuant to which (i) SPIL would issue 840,600,000 SPIL Common Shares in exchange for 359,230,769 common shares issued by Hon Hai,
representing approximately 21.24% and 2.20% of the issued and outstanding share capital of SPIL and Hon Hai, respectively (the
“Hon Hai Share Exchange”), and (ii) SPIL and Hon Hai would cooperate on certain commercial matters.
The Hon Hai Share Exchange would have required
an increase in the authorized but unissued capital of SPIL (the “Capital Increase”) and amendments to SPIL’s
acquisition and disposition procedures (the “By-Law
Amendments”),
which would have required the approval of SPIL’s shareholders at an extraordinary shareholders’ meeting (the “First
EGM”). On August 28, 2015, SPIL called the First EGM to be held on October 15, 2015, and set a record date of September
15, 2015 for the First EGM, which date was prior to the expiration and closing of the Initial ASE Tender Offers. ASE was therefore
not eligible to vote its SPIL Common Shares at the First EGM.
ASE publicly opposed the Hon Hai Share
Exchange on the basis that it was not in the best interests of SPIL shareholders for various reasons, including that the Hon Hai
Share Exchange would result in significant dilution for all SPIL shareholders and would bring no cash to SPIL or its shareholders.
The Initial ASE Tender Offers expired on
September 22, 2015. Pursuant to the Initial ASE Tender Offers, there were validly tendered and not validly withdrawn a number of
SPIL Common Shares and SPIL ADSs representing approximately 36.83% of the issued and outstanding share capital of SPIL. On September
23, 2015, ASE accepted for purchase SPIL Common Shares and SPIL ADSs representing approximately 24.99% of the issued and outstanding
share capital of SPIL.
On September 22, 2015, ASE filed an injunction
with the Taichung District Court seeking to enjoin the First EGM. Following the expiration of the Initial ASE Tender Offers, on
September 23, 2015, ASE’s Chairman and Chief Executive Officer, Mr. Jason C.S. Chang met with SPIL’s Chairman, Mr.
Bough Lin, to express his regret that, due to certain legal limitations, ASE had not been able to discuss the Initial ASE Tender
Offers with SPIL prior to its commencement. Mr. Chang also reiterated that the purpose of ASE’s investment was to explore
avenues of mutual cooperation in the face of intensifying global competition and industry consolidation and that ASE strongly opposed
the proposed Hon Hai Share Exchange.
On September 28, 2015 and October 1, 2015,
ASE issued open letters to SPIL shareholders urging them to vote against the proposals to be voted on at the First EGM.
On October 1, 2015, pursuant to the Initial
ASE Tender Offers, ASE closed its acquisition of, and paid for, 725,749,060 SPIL Common Shares and 10,650,188 SPIL ADSs, representing
approximately 24.99% of the issued and outstanding share capital of SPIL.
Also on October 1, 2015, ASE filed a suit
in the Taichung District Court seeking the invalidation of the SPIL Board’s resolution convening the First EGM.
On October 5, 2015, ASE issued a further
open letter to SPIL shareholders urging them to vote against the proposals to be voted on at the First EGM, noting that two leading
proxy advisors agreed with ASE’s recommendation.
On October 13, 2015, the Taichung District
Court denied ASE’s petition seeking an injunction to enjoin SPIL’s First EGM.
On October 15, 2015, SPIL’s Capital
Increase and By-Law Amendments were not approved by its shareholders at the First EGM.
Also on October 15, 2015, SPIL filed a
suit in the Kaohsiung District Court (the “SPIL Kaohsiung Suit”) against ASE seeking the invalidation of the Initial
ASE Tender Offers and confirmation that ASE did not, in SPIL’s view, have the right to be registered as a shareholder in
SPIL’s shareholder register. ASE indicated publicly that it believed that this lawsuit was without merit. On the same day,
ASE withdrew its suit seeking the invalidation of the SPIL Board’s resolution convening the First EGM. Subsequently, the
Kaohsiung District Court revoked the SPIL Kaohsiung Suit on June 27, 2016.
On October 22, 2015 and on November 2,
2015, Mr. Chang sent letters to Mr. Lin reiterating that the purpose of ASE’s investment in SPIL was to establish a basis
for possible future cooperation and that ASE wished to discuss and establish specific plans for such cooperation.
On November 4, 2015, Mr. Chang received
a letter from Mr. Lin asserting that SPIL did not recognize ASE as a shareholder of SPIL and requesting that ASE provide a written
undertaking prior to any discussions with SPIL that (i) if ASE became a shareholder of SPIL, ASE would maintain its financial investor
status, and would not intervene and participate in or interfere with SPIL’s business operations, and would not nominate any
person for appointment
as
a director of SPIL, and (ii) ASE would treat the communications and discussions between both parties as confidential, and would
not disclose such information externally without SPIL’s consent.
On November 6, 2015, Mr. Chang sent a letter
to Mr. Lin stating that ASE had lawfully acquired 779,000,000 SPIL Common Shares (including those represented by SPIL ADSs) upon
completion of the Initial ASE Tender Offers and requesting a meeting before November 13, 2015 to discuss specific details of SPIL’s
proposed undertaking and plans for potential cooperation.
On November 16, 2015, ASE filed an amendment
to its report on Schedule 13D indicating that ASE had become increasingly concerned that the combination of SPIL’s open animosity
to ASE, SPIL’s demonstrated willingness to consider ill-conceived transactions, and SPIL’s expressed desire to seek
out one or more other opportunities with third parties, all posed a very real threat that SPIL would at some future date attempt
to adopt one or more further defensive measures that could damage SPIL and ASE’s 24.99% interest therein.
The amendment noted that although ASE continued
to seek avenues of cooperation with SPIL, and while no decision had been made, ASE believed that it needed to evaluate all possibilities
available to it to protect its significant investment in SPIL and to react to any such defensive measures. Such possibilities included
potential proposals to SPIL relating to cooperation or other potential transactions, influencing the management of SPIL, or further
acquisitions of SPIL Common Shares, whether in the market or through one or more tender offers.
On December 11, 2015, SPIL announced a
potential transaction with Tsinghua Unigroup Ltd. (“Tsinghua” and the “Tsinghua Transaction”). Pursuant
to the Tsinghua Transaction, if approved by SPIL shareholders, Tsinghua would purchase newly issued SPIL Common Shares by way of
private placement at a price of NT$55 per SPIL Common Share. The Tsinghua Transaction would also have required SPIL shareholder
approval. On the same date, SPIL announced that it planned to hold an extraordinary shareholders’ meeting on January 28,
2016 for shareholders to vote on the Tsinghua Transaction. Upon completion of the Tsinghua Transaction, Tsinghua would have owned
24.9% of SPIL’s then-outstanding Common Shares.
ASE believed that the Tsinghua Transaction
was not in the best interests of SPIL’s shareholders and was a defensive and dilutive transaction that brought no cash to
SPIL’s shareholders. On December 14, 2015, in order to protect its significant investment in SPIL in light of the Tsinghua
Transaction and the reasons described above in relation to ASE’s November 16, 2015 amendment to its report on Schedule 13D,
ASE submitted a written proposal to the SPIL Board proposing to acquire 100% of the remaining outstanding SPIL Common Shares for
NT$55 per SPIL Common Share in cash and 100% of the remaining outstanding SPIL ADSs for NT$275 per SPIL ADS in cash (the “December
14, 2015 Proposal”). The December 14, 2015 Proposal was subject to execution and delivery of a mutually satisfactory definitive
share exchange agreement containing customary terms and conditions and contingent on the termination or cancellation of the Tsinghua
Transaction in accordance with its terms or applicable laws. ASE requested a written response from the SPIL Board by December 21,
2015 confirming whether or not SPIL was willing to discuss the December 14, 2015 Proposal.
On December 21, 2015, SPIL issued a press
release stating that it would assess the December 14, 2015 Proposal and that it would be discussed at a meeting of the SPIL Board
on December 28, 2015.
Based
upon the foregoing and other factors, ASE determined that there was no realistic possibility of a cooperative dialogue with SPIL
at ASE’s existing ownership level in SPIL and that there was a very real risk that SPIL would at some future date attempt
to adopt one or more further defensive measures that could further damage the value of ASE’s investment. As a result, ASE
concluded that it had no viable alternative other than to seek to increase its ownership stake in SPIL.
On December 22,
2015, ASE announced that it planned to commence on December 29, 2015 tender offers in the ROC (the “Second ROC Offer”)
and the United States (the “Second U.S. Offer,” together with the Second ROC Offer, the “Second ASE Tender Offers”)
for up to 770,000,000 SPIL Common Shares, including those represented by SPIL ADSs, at a price of NT$55 per SPIL Common Share (and
NT$275 per SPIL ADS), which represented approximately 24.71% of the issued and outstanding share capital of SPIL. In addition,
ASE disclosed that if the Second ASE Tender Offers were consummated, subject to either (i) SPIL’s shareholders not approving
the Tsinghua Transaction at the proposed extraordinary shareholders’ meeting on January 28, 2016 or (ii) SPIL terminating
the Tsinghua Transaction in accordance with its terms or applicable law and cancelling the proposed extraordinary shareholders’
meeting, ASE would seek to cause SPIL to enter into a share exchange or other similar business combination with ASE pursuant to
which ASE would acquire 100% of the shares of SPIL not owned by ASE (a “Proposed Combination”) for the consideration
of NT$55 per SPIL Common
Share
and NT$275 per SPIL ADS (subject to adjustment if SPIL issued shares or cash dividends prior to the closing of such Proposed Combination).
In order to implement a Proposed Combination, if the Second ASE Tender Offers were consummated, ASE intended to seek control of
the SPIL Board. On the same date, SPIL issued a press release requesting that ASE cease its plan to commence the Second ASE Tender
Offers and provide responses to certain questions as a precondition to any potential discussions on the December 14, 2015 Proposal.
SPIL also announced on the same date that it planned to postpone the proposed extraordinary shareholders’ meeting that had
been scheduled for January 28, 2016 to consider the Tsinghua Transaction.
On December 28, 2015, ASE announced that
it intended, as previously announced, to commence the Second ASE Tender Offers on December 29, 2015 and that it believed that the
Second ASE Tender Offers did not preclude any discussions with SPIL with respect to the December 14, 2015 Proposal. Accordingly,
on December 29, 2015, ASE commenced the Second ASE Tender Offers.
On December 30, 2015, SPIL announced that
it would convene meetings of a review committee and the SPIL Board in connection with the Second ASE Tender Offers.
On January 7, 2016, SPIL issued a press
release and filed a Solicitation/Recommendation Statement on Schedule 14D-9 (as amended, the “Second Schedule 14D-9”)
with the SEC announcing the SPIL Board recommendation, which it subsequently amended, that shareholders of SPIL consider the reservations
of the review committee and the SPIL Board regarding the Second ASE Tender Offers, and further review the relevant risks before
deciding individually whether or not to participate in the Second ASE Tender Offers.
On February 4, 2016, ASE extended the Second
ASE Tender Offers until March 17, 2016 in order to permit the TFTC further time to review the Proposed Combination. The Second
ASE Tender Offers had previously been scheduled to expire on February 16, 2016.
Between February 17, 2016 and March 9,
2016, ASE published various advertisements in newspapers in the ROC and made a series of shareholder communications in connection
with the Second ASE Tender Offers. During this time, SPIL filed a number of amendments to the Second Schedule 14D-9 clarifying
the scope of its recommendation in respect of the Second ASE Tender Offers.
On March 17, 2016, ASE announced that the
Second ASE Tender Offers were unsuccessful, as ASE did not receive approval from the TFTC for the proposed combination between
ASE and SPIL prior to the expiration of the Second ASE Tender Offers. Notwithstanding the failure of the Second ASE Tender Offers,
ASE stated that it continued to seek to obtain control of SPIL, with the purpose of effecting an acquisition of 100% of the SPIL
Common Shares and SPIL ADSs that ASE did not already own. In addition, ASE stated that it would otherwise continue to seek opportunities
for cooperation with SPIL and would consider other possibilities, including further acquisitions of SPIL Common Shares.
On March 17, 2016, ASE disclosed that the
TFTC was continuing to review the Proposed Combination. If the TFTC approved the Proposed Combination, ASE expected to continue
to seek the support of SPIL shareholders in order to acquire 100% of the issued and outstanding share capital of SPIL not owned
by ASE. ASE further explained that, simultaneously with the acquisition of SPIL, ASE planned to establish a holding company in
Taiwan that would hold 100% of the equity interests of both ASE and SPIL such that ASE and SPIL would be wholly owned subsidiaries
of such holding company, which would maintain all current operations of ASE and SPIL in Taiwan.
Between March 24, 2016 and April 7, 2016,
ASE acquired by way of market purchases additional SPIL Common Shares and SPIL ADSs amounting to an additional 8.29% of the issued
and outstanding SPIL Common Shares (including those represented by SPIL ADSs) for an aggregate purchase price of NT$13.7 billion.
On April 17, 2016, Mr. Lin and Mr. Chang,
together with executives of ASE and SPIL, had a meeting at which the possibility of a combination transaction was discussed. During
the meeting, Mr. Lin and Mr. Chang discussed whether it would be in the best interests of the two companies and their respective
shareholders for ASE and SPIL to explore the possibility of entering into a combination transaction.
Between April 25, 2016 and May 19, 2016,
representatives of ASE and SPIL, together with their respective legal and financial advisors, held a series of in-person meetings
and conference calls to discuss a variety of issues and explore whether it would be possible to develop the terms of a possible
share exchange transaction between
ASE
and SPIL (“Proposed Share Exchange”), including the structure, price, board composition of the new holding company
after the Proposed Share Exchange, protection of SPIL’s employee rights and the timing of any announcement. ASE furnished
SPIL with proposed draft transaction documents and presentation materials relating to the Proposed Share Exchange, which contemplated
SPIL and ASE entering into a share exchange transaction at a price of NT$55.0 per SPIL Common Share and set forth the other terms
of such transaction. There was no agreement with respect to the Proposed Share Exchange by the end of these meetings.
On April 28, 2016, SPIL issued a press
release announcing the termination of the Tsinghua Transaction.
On May 26, 2016, the ASE Board held a meeting,
in which members of ASE’s senior management participated, to discuss the draft Joint Share Exchange MOU and review the conclusions
of ASE’s legal and financial advisors. In connection with the deliberations of the ASE Board, an independent public accounting
firm engaged by ASE, Mr. Ji-Sheng Chiu, CPA, delivered to the ASE Board his oral opinion, which was confirmed by delivery of a
written opinion dated May 25, 2016, that the cash consideration of NT$55.00 per SPIL Common Share and the exchange ratio pursuant
to which ASE Common Shares would be exchanged for shares in the holding company, were reasonable and fair.
On May 26, 2016, ASE and SPIL issued a
joint press release announcing the execution of the Joint Share Exchange MOU and setting a deadline for execution of a definitive
Joint Share Exchange Agreement of June 25, 2016. Also on May 26 2016, Mr. Chang sent a letter to Mr. Lin reiterating his support
for the proposed combination.
On May 27, 2016, ASE and SPIL clarified
by respective press releases that the actual Cash Consideration of NT$55 per SPIL Common Share included the cash dividend and a
returning of capital reserve of NT$3.8 per SPIL Common Share previously declared by SPIL, and that the adjusted Cash Consideration
should be NT$51.2 per SPIL Share.
On June 3, 2016, Baker & McKenzie sent
SPIL’s legal counsel Jones Day a proposed draft of the Joint Share Exchange Agreement, which contemplated, among other things,
that ASE would exchange all of ASE’s issued ASE Common Shares for shares in a newly formed holding company, and all issued
SPIL Common Shares would be acquired for NT$55.00 per share in cash and NT$275 per SPIL ADS (prior to cash dividend and a returning
of capital reserve adjustment) .
Between June 3, 2016 and June 24, 2016,
representatives of ASE and SPIL, together with representatives of each of their legal and financial advisors, held a series of
conference calls and in-person meetings to negotiate the terms of the draft Joint Share Exchange Agreement, including in relation
to post-closing commitments of the surviving company, the timetable for the transaction and the requirements relating to obtaining
regulatory approvals. During this period, ASE’s legal advisors Davis Polk and Baker & McKenzie exchanged multiple drafts
of the draft Joint Share Exchange Agreement with SPIL’s legal advisors Simpson Thacher and Jones Day.
On June 24, 2016, ASE and SPIL executed
a supplemental Joint Share Exchange MOU, extending the deadline for ASE and SPIL to execute a definitive agreement to June 30,
2016.
On June 30, 2016, the ASE audit committee
unanimously determined that the draft Joint Share Exchange Agreement and the transactions contemplated thereby were advisable,
fair to and in the best interests of ASE and its shareholders and approved the draft Joint Share Exchange Agreement and the other
transactions contemplated therein. Later that same day, the ASE Board met to discuss the draft Joint Share Exchange Agreement,
in which members of ASE senior management participated. Prior to the meeting, members of the ASE Board had been provided with a
set of meeting materials, including the draft Joint Share Exchange Agreement and certain financial analyses. In connection with
the deliberations of the ASE Board, an independent expert engaged by ASE, Mr. Ji-Sheng Chiu, CPA, delivered to the ASE Board his
oral opinion, which was confirmed by delivery of a written opinion dated June 29, 2016, that the consideration in the draft Joint
Share Exchange Agreement of NT$55.00 per SPIL Common Share and NT$275 per SPIL ADS (prior to cash dividend and a returning of capital
reserve adjustment) and the exchange ratio pursuant to which ASE Common Shares would be exchanged for shares in the holding company,
were reasonable and fair.
On June 30, 2016, ASE and SPIL issued a
joint press release announcing the execution of the Joint Share Exchange Agreement.
Recommendation and Approval of the ASE Board and Reasons
for the Share Exchange
By a vote at a meeting of the audit committee
of ASE held on June 30, 2016 and by a subsequent vote at a meeting of the ASE Board held on the same date, the ASE Board and ASE’s
audit committee unanimously determined that the Joint Share Exchange Agreement and the transactions contemplated thereby were advisable,
fair to and in the best interests of ASE and its shareholders and approved the Share Exchange and the other transactions contemplated
by the Joint Share Exchange Agreement.
The ASE Board recommends that ASE shareholders vote “FOR” the approval of
the Joint Share Exchange Agreement and the Share Exchange and the other transactions contemplated by the Joint Share Exchange Agreement
and “FOR” the approval of the other proposals to be voted on at the ASE EGM.
In evaluating the proposed Share Exchange,
the ASE Board consulted with ASE’s management and legal advisors and independent experts and, in reaching its determination
and recommendation, the ASE Board considered a number of factors. The ASE Board also consulted with outside legal counsel regarding
its obligations, legal due diligence matters and the terms of the Joint Share Exchange Agreement.
Many of the factors considered supported
the conclusion of ASE Board that the Joint Share Exchange Agreement and the transactions contemplated thereby are advisable, fair
to and in the best interests of ASE and its shareholders, including the following, subject to the Post-Closing Operation and Corporate
Governance section set forth on page 86 herein (not in any relative order of importance):
|
·
|
continuing consolidation trend in the semiconductor industry and
the
intensifying competitive landscape in the semiconductor packaging and testing industry poses significant risks and uncertainties
for ASE’s and SPIL’s business if each company continues to operate separately;
|
|
·
|
the expectation that the combination of ASE and SPIL under the holding
company structure will allow both companies to better utilize their total capacity to achieve broader service coverage across products
and offer more innovative and complete solutions to their customers;
|
|
·
|
that ASE and SPIL can pool their experience and know-how, as well
as their respective existing product footprints for high-quality packaging and testing service solutions, which will allow customers
to benefit from best technologies and also create incentives for other packaging and testing service providers to use similar production
process;
|
|
·
|
the expectation that the combination of ASE and SPIL will allow each company to have better insights to semiconductor customers
and end markets to enable more accurate forecasting of customer demand and facilitate better planning and capacity investment,
which would in turn allow ASE and SPIL the ability to execute and deliver on its business plans throughout the business cycle and
in a semiconductor industry that is highly competitive, cyclical and subject to constant and rapid technological change;
|
|
·
|
the opportunity to further expand ASE’s and SPIL’s global market reach and customer base leveraging a “dual-brand
cross-selling operations” model and expand into other business areas of strategic importance;
|
|
·
|
the expectation based on estimates by ASE’s and SPIL’s management that both companies can achieve significant synergies
in research and development investments and capital expenditures as a result of reduction of duplicative investments, allowing
for significant cost synergies and expended investment budgets;
|
|
·
|
the expectation that the larger scale organization, greater marketing resources and financial strength of HoldCo will lead
to improved opportunities for marketing and cross selling ASE’s and SPIL’s products after the combination;
|
|
·
|
the holding company structure will allow HoldCo to focus on devising the group’s overall strategy and maximize interests
of the group as a whole, while allowing each subsidiary, including ASE and SPIL, to concentrate on its particular business area
and operations;
|
|
·
|
the fact that the new holding company will function as the group’s overall resources allocation and strategic planning
platform to achieve a more streamlined management structure among the group’s distinct business
|
concentration
area to further improve the group’s overall operational efficiency and solidify professional managerial function within
each subsidiary to ensure sustainable development of the group;
|
·
|
the fact that ASE’s current shareholders will own approximately the same ownership and voting interest in HoldCo following
the completion of the Share Exchange;
|
|
·
|
the First Crowe Horwath Opinion, dated May 25, 2016, and the Second Crowe Horwath Opinion, dated June 29, 2016, to the ASE
Board as to the fairness, from a financial point of view and as of the respective date of each opinion, to ASE, of the Cash Consideration
to be paid by HoldCo to SPIL shareholders and the exchange ratio pursuant to which ASE shareholders will exchange their shares
for HoldCo Shares pursuant to the Joint Share Exchange Agreement, which opinions were based on and subject to the assumptions made,
procedures followed and matters considered in the review undertaken by Mr. Ji-Sheng Chiu, CPA, as more fully described below in
the section entitled “— Opinions of ASE’s Independent Expert”; and
|
|
·
|
the review by the ASE Board with its advisors of the structure of the proposed Share Exchange and the financial and other terms
of the Joint Share Exchange Agreement, including the parties’ representations, warranties and covenants, the conditions to
their respective obligations and the termination provisions, as well as the likelihood of the completion of the proposed Share
Exchange and the evaluation by the ASE Board of the likely time period necessary to complete the Share Exchange.
|
In the course of its deliberations, the
ASE Board also considered a variety of risks and other potentially negative factors, including the following (not in any relative
order of importance):
|
·
|
the possibility
that the Share Exchange may not be completed as a result of the failure to obtain the
required approval from ASE shareholders or SPIL shareholders, the failure by ASE to obtain
financing, or otherwise, or that completion may be unduly delayed for reasons beyond
the control of ASE and/or SPIL, including the potential length of the regulatory review
process and the risk that applicable antitrust and competition authorities may prohibit
or enjoin the Share Exchange or otherwise impose unanticipated conditions on ASE and/or
SPIL, in order to obtain clearance for the Share Exchange, and the effect the resulting
termination of the Joint Share Exchange Agreement may have on the trading price of the
ASE Common Shares and ASE’s operating results, including ASE’s potential
obligation to pay SPIL a liquidated damages in the amount of NT$8.5 billion (US$0.3 billion),
as described in the section entitled “The Joint Share Exchange Agreement —
Pre-Closing Covenants and Agreements”;
|
|
·
|
the possible disruption to ASE’s business that may result from the Share Exchange, including the potential for diversion
of management and employee attention from other strategic opportunities or operational matters and for increased employee attrition
during the period prior to completion of the Share Exchange, and the potential effect of the Share Exchange on ASE’s business
and relations with customers and suppliers;
|
|
·
|
the adverse impact that business uncertainty pending completion of the Share Exchange could have on ASE’s ability to
attract, retain and motivate key personnel;
|
|
·
|
the difficulty and costs inherent in consolidating resources in ASE and SPIL under the holding company structure and the risk
that anticipated strategic and other benefits to ASE and SPIL following completion of the Share Exchange, including the estimated
cost savings and cost synergies described above, will not be realized or will take longer to realize than expected;
|
|
·
|
the transaction costs to be incurred in connection with the Share Exchange;
|
|
·
|
that failure to complete the Share Exchange could lead to negative perceptions among investors, potential investors, employees
and customers;
|
|
·
|
operational inefficiencies due to a layered corporate structure and valuation discounts as a result of the adoption of a holding
company structure which may have an adverse effect on the trading value of HoldCo Common Shares or HoldCo ADSs; and
|
|
·
|
risks of the type and nature described in the sections entitled “Risk Factors” and “Cautionary Statements
Regarding Forward-Looking Statements.”
|
In addition, the ASE Board was fully aware
of and has deliberated over the history of prior litigations between ASE and SPIL as described in the section entitled “—Background
of the Share Exchange; Past Contacts; Negotiations.” ASE has intended to seek a friendly transaction with SPIL from the very
beginning. The purpose of its lawsuits initiated in September and October 2015 against SPIL was to protect its investment in SPIL.
Although SPIL filed the SPIL Kaohsiung Suit in October 2015 seeking to invalidate ASE’s investment, the Kaohsiung District
Court revoked the SPIL Kaohsiung Suit on June 27, 2016 and the parties eventually agreed to the Share Exchange transaction after
friendly and good-faith negotiations. This result is what ASE has always been pursuing and the ASE Board did not view the prior
litigations between the two parties as detrimental to an eventual friendly outcome.
The ASE Board considered all of these factors
as a whole and, on balance, concluded that overall, the potential benefits of the Share Exchange to ASE and its shareholders outweighed
the risks which are mentioned above, and it supported the decision to approve the Share Exchange and the other transactions contemplated
by the Joint Share Exchange Agreement. The foregoing discussion of the information and factors considered by the ASE Board is not
exhaustive. In view of the wide variety of factors considered by the ASE Board in connection with its evaluation of the proposed
Share Exchange and the complexity of these matters, the ASE Board did not consider it practical to, nor did it attempt to, quantify,
rank or otherwise assign relative weights to the specific factors that it considered in reaching its decision. Rather, the ASE
Board viewed its decisions as being based on the totality of the information presented to it and the factors it considered. The
ASE Board evaluated the factors described above, among others, and reached a consensus that the Joint Share Exchange Agreement
and the transactions contemplated thereby were advisable, fair to and in the best interests of ASE and its shareholders. In considering
the factors described above and any other factors, individual members of the ASE Board may have viewed factors differently or given
different weight or merit to different factors.
Interests of ASE in SPIL Common Shares and ADSs
On October 1, 2015, ASE closed its acquisition
of, and paid for, 779,000,000 SPIL Common Shares (including those represented by SPIL ADSs) at a price of NT$45 per SPIL Common
Share and NT$225 per SPIL ADS pursuant to the tender offers in the U.S. and in the ROC.
In March and April 2016, ASE acquired an
additional 258,300,000 SPIL Common Shares (including those represented by SPIL ADSs) through open market purchases.
The
following table sets forth certain information relating to the aforesaid ASE’s open market purchases:
Period
|
|
Total Number of SPIL Common Shares Purchased
|
|
Average Price Paid Per SPIL Common Share (in NT$)
|
|
Range of Price Paid Per SPIL Common Share (in NT$)
|
March 24, 2016-March 30, 2016
|
|
|
|
201,547,740
|
|
|
|
53.16
|
|
|
|
51.80-54.00
|
|
April 1, 2016-April 7, 2016
|
|
|
|
8,300,000
|
|
|
|
52.91
|
|
|
|
50.64-53.00
|
|
|
Total:
|
|
|
|
209,847,740
|
|
|
|
-
|
|
|
|
-
|
|
Period
|
|
Total Number of SPIL ADSs Purchased
|
|
Average Price Paid Per SPIL ADS (in US$)
|
|
Range of Price Paid Per SPIL ADS (in US$)
|
March 24, 2016-March 30, 2016
|
|
|
|
9,690,452
|
|
|
|
8.13
|
|
|
|
7.91-8.26
|
|
|
Total:
|
|
|
|
9,690,452
|
|
|
|
-
|
|
|
|
-
|
|
As of the date of this proxy statement/prospectus,
(a) SPIL had an aggregate of 3,116,361,139 SPIL Common Shares, including 188,916,960 SPIL Common Shares represented by SPIL ADSs,
issued and outstanding; and (b) ASE held 988,847,740 SPIL Common Shares and 9,690,452 SPIL ADSs.
Except as set forth elsewhere in this proxy
statement/prospectus: (a) none of ASE and, to ASE’s knowledge, any associate or majority-owned subsidiary of ASE beneficially
owns or has a right to acquire any SPIL Common Shares, SPIL ADSs or other equity securities of SPIL; (b) none of ASE and,
to ASE’s knowledge, any associate or
majority-owned
subsidiary of ASE has effected any transaction in SPIL Common Shares, SPIL ADSs or other equity securities of SPIL during the
past 60 days; and (c) during the two years before the date of this proxy statement/prospectus, there have been no transactions
between ASE, its subsidiaries, on the one hand, and SPIL or any of its executive officers, directors, controlling shareholders
or affiliates, on the other hand, that would require reporting under SEC rules and regulations.
Certain Financial Projections
ASE does not, as a matter of course, publicly
disclose forecasts or internal projections as to future performance, earnings or other results due to, among other reasons, the
uncertainty of the underlying assumptions and estimates. No financial projections were prepared by ASE or their advisors in connection
with the Share Exchange.
Opinions of ASE’s Independent Expert
Crowe Horwath Opinions
On May 25, 2016, Mr. Ji-Sheng Chiu, CPA,
of Crowe Horwath (TW) CPAs, an independent expert engaged by ASE, delivered to ASE its written opinion that the proposed exchange
of each ASE Common Share for 0.5 HoldCo Common Shares and each SPIL Common Share for NT$55 in cash pursuant to the Share Exchange
was fair and reasonable. On June 29, 2016, Mr. Ji-Sheng Chiu delivered to ASE another written opinion that the proposed exchange
of each ASE Common Share for 0.5 HoldCo Common Shares and each SPIL Common Share for NT$55 in cash pursuant to the Share Exchange
was fair and reasonable.
ASE selected Mr. Ji-Sheng Chiu of Crowe
Horwath (TW) CPAs to act as an independent expert to provide the Crowe Horwath Opinions in connection with the Share Exchange
based on Mr. Ji-Sheng Chiu’s reputation, experience in the Taiwan market and familiarity with ASE and its business. Mr.
Ji-Sheng Chiu is regularly engaged in the valuation of businesses and their securities in connection with mergers and acquisitions,
private placements and related financings and valuations for corporate and other purposes for ROC corporations. Mr. Ji-Sheng Chiu
in the past has delivered opinions to ASE during the two-year period prior to date of the First Crowe Horwath Opinion in connection
with (i) a spin-off transaction involving Universal Scientific Industrial Co., Ltd., a subsidiary of ASE, (ii) the Initial ASE
Tender Offers, (iii) a private placement under which ASE sold its shareholdings in Universal Scientific Industrial Co., Ltd. to
another subsidiary of ASE for corporate restructuring proposes, (iv) the proposal to SPIL to acquire 100% of its outstanding shares
not owned by ASE in cash dated December 14, 2015 and (v) the Second ASE Tender Offers. Mr. Ji-Sheng Chiu received aggregate compensation
of NT$300,000 (US$9,891.0) in connection with these prior opinions and was paid an opinion fee of NT$60,000 (US$1,978.2) for each
of the First Crowe Horwath Opinion and the Second Crowe Horwath Opinion. Mr. Ji-Sheng Chiu may in the future deliver opinions
to ASE, for which services Mr. Ji-Sheng Chiu may receive compensation. No material limitations were imposed by ASE on Mr. Ji-Sheng
Chiu’s work in connection with the Share Exchange.
The full text of the English translation
of the Crowe Horwath Opinions has been included in Annex B-1 and Annex B-2 to this proxy statement/prospectus. The Crowe Horwath
Opinions will also be available for any interested ASE shareholder (or any representative of an ASE shareholder who has been so
designated in writing) to inspect and copy at ASE’s principal executive offices during regular business hours. The Crowe
Horwath Opinions outline the procedures followed, assumptions made, matters considered and qualifications and limitations on the
review undertaken by Mr. Ji-Sheng Chiu in rendering the Crowe Horwath Opinions. The descriptions of the Crowe Horwath Opinions
set forth below are qualified in their entirety by reference to the full text of such opinions. Holders of ASE Common Shares or
SPIL Common Shares are urged to read the entire opinion carefully in connection with their consideration of the Share Exchange.
The Crowe Horwath Opinions speak only as
of the date of each such opinion. The Crowe Horwath Opinions were directed to the ASE Board and are directed only to the fairness
of the proposed exchange of each ASE Common Share for 0.5 HoldCo Common Shares and each SPIL Common Share for NT$55 in cash pursuant
to the Share Exchange. They do not address the underlying business decision of ASE or SPIL to engage in the Share Exchange and
do not constitute recommendation as to whether or not any holder of ASE Common Shares should vote in favor of the Share Exchange
at any shareholder meeting, or at all. The Crowe Horwath Opinions was one of the many factors considered by the ASE Board in evaluating
the Share Exchange and should not be viewed as determinative of the views of the ASE Board with respect to the Share Exchange.
The consideration to be paid in the Share Exchange was determined through arm’s length negotiations between ASE and SPIL.
Mr. Ji-Sheng Chiu did
not
recommend any specific amount of consideration to ASE or the ASE Board or advise that any specific amount of consideration constituted
the only appropriate consideration for the Share Exchange.
In connection with rendering the Crowe
Horwath Opinions, Mr. Ji-Sheng Chiu reviewed and considered the audited or unaudited financial statements of ASE and SPIL for the
years 2014, 2015 and the first quarter of 2016, relevant business overviews, financial statements, and other materials Mr. Ji-Sheng
Chiu deemed relevant and available to the public from, among other sources, the TWSE’s Market Observation Post System, the
website of the TWSE, the website of the Taipei Exchange (GreTai Securities Market), the Commerce and Industry Registration Enquiry
System of the Department of Commerce, Ministry of Economic Affairs, Taiwan, the Taiwan Economic Journal (TEJ) Database, and comparison,
analysis and historical stock price data of ASE, SPIL, and their peers compiled by Bloomberg. In performing its review, Mr. Ji-Sheng
Chiu relied upon the accuracy and completeness of all of the financial and other information that was available to Mr. Ji-Sheng
Chiu from public sources or that was otherwise reviewed by Mr. Ji-Sheng Chiu, and Mr. Ji-Sheng Chiu assumed such accuracy and completeness
for purposes of preparing the Crowe Horwath Opinions.
Mr. Ji-Sheng Chiu expressed no opinion
as to the trading values of ASE Common Shares or SPIL Common Shares after the date of each respective Opinion or what the value
of ASE Common Shares or SPIL Common Shares will be upon consummation of the Share Exchange. Mr. Ji-Sheng Chiu expressed no opinion
as to any of the legal, accounting, and tax matters relating to the Share Exchange. The Crowe Horwath Opinions were necessarily
based on financial, economic, market and other conditions as in effect on, and the information made available to Mr. Ji-Sheng Chiu
as of, the date of the respective Crowe Horwath Opinions. Events occurring after the date thereof could materially affect the Crowe
Horwath Opinions. Mr. Ji-Sheng Chiu has not undertaken to update, revise, reaffirm or withdraw the Crowe Horwath Opinions or otherwise
comment upon events occurring after the respective date of the Crowe Horwath Opinions.
In rendering the Crowe Horwath Opinions,
Mr. Ji-Sheng Chiu performed a variety of financial analyses. The following is a summary of the material analyses performed by Mr.
Ji-Sheng Chiu in each opinion, but it is not a complete description of all the analyses underlying each opinion. The summary includes
information presented in tabular format. In order to fully understand the financial analyses, these tables must be read together
with the accompanying text. The tables alone do not constitute a complete description of the financial analyses. The preparation
of a fairness opinion is a complex process involving subjective judgments as to the most appropriate and relevant methods of financial
analysis and the application of those methods to the particular circumstances. The process, therefore, is not necessarily susceptible
to a partial analysis or summary description. Mr. Ji-Sheng Chiu believes that his analyses must be considered as a whole and that
selecting portions of the factors and analyses to be considered without considering all factors and analyses could create an incomplete
view of the evaluation process underlying his opinions. Also, no company included in Mr. Ji-Sheng Chiu’s comparative analyses
described below is identical to SPIL and no transaction is identical to the Share Exchange. Accordingly, an analysis of comparable
companies or transactions involves complex considerations and judgments concerning differences in financial and operating characteristics
of the companies and other factors that could affect the public trading values of SPIL and the companies to which they are being
compared.
First Crowe Horwath Opinion
Consideration for ASE Common Shares
Mr. Ji-Sheng Chiu evaluated the proposed
exchange of each ASE Common Share for 0.5 HoldCo Common Shares pursuant to Share Exchange. Mr. Ji-Sheng Chiu used the equity attributable
to owners of parent of ASE based on the audited or unaudited consolidated financial statements of ASE (NT$158,016,614,000 as of
March 31, 2016) and the total issued ASE Common Shares based on the latest update from the Commerce and Industry Registration Enquiry
System of Department of Commerce, Ministry of Economic Affairs, Taiwan (7,918,272,896 as of April 26, 2016) to calculate a net
book value per share of NT$19.956. Under the Share Exchange, 7,918,272,896 ASE Common Shares would result in 3,959,136,448 HoldCo
Common Shares as of the Effective Time. The net book value per HoldCo Common Share was calculated based on ASE’s equity attributable
to owners of parent as of March 31, 2016 to be NT$39.912 per share. Mr. Ji-Sheng Chiu concluded that the shareholders’ equity
for the holders of HoldCo Common Shares would not be impaired in any way by the exchange ratio of 0.5 HoldCo Common Shares for
each ASE Common Share.
The fact that the net value of ASE’s
equity attributable to owners of parent as of the Effective Time may vary from that as of March 31, 2016 was also considered. However,
since the shareholders of ASE will contribute all the ASE Common Shares as of the Effective Time in exchange for all the HoldCo
Common Shares, Mr. Ji-Sheng Chiu concluded that the shareholders’ equity for the holders of HoldCo Common Shares will not
be affected as a result of the Share Exchange.
Based on this analysis, Mr. Ji-Sheng Chiu
concluded that, as of May 25, 2016, the proposed exchange of each ASE Common Share for 0.5 HoldCo Common Shares pursuant to the
Share Exchange was fair and reasonable.
Consideration for SPIL Common Shares
Mr. Ji-Sheng Chiu elected for a market
approach as the primary evaluation method while taking into account other non-quantitative factors to evaluate the reasonableness
of the proposed exchange of each SPIL Common Share for NT$55 in cash pursuant to the Share Exchange. Under the market approach,
Mr. Ji-Sheng Chiu adopted a (i) market price method that analyzed historical market prices of the SPIL Common Shares; (ii) a price-book
ratio method that applied the average price-to-book value ratios of the Comparison Group (as defined below) to SPIL’s book
value for the quarter ended March 31, 2016; and (iii) a price-earnings ratio method that applied the average price to earnings
per share ratios of the Comparison Group to SPIL’s earnings per share for the four quarters ended March 31, 2016. Mr. Ji-Sheng
Chiu determined not to use an income approach, which requires using a company’s estimates for future cash flows, because
such an approach involves multiple assumptions and has a relatively higher level of uncertainty and lesser objectivity as compared
to other valuation methods. In addition, Mr. Ji-Sheng Chiu determined that a cost approach was not appropriate for evaluation in
light of SPIL’s operating model and capital structure, and therefore did not use such an approach.
Of the semiconductor manufacturing companies
listed on the TWSE, three industry peers were selected for comparison based on relative similarities in customer attributes, business
activities and business mode: ChipMOS TECHNOLOGIES (Bermuda) LTD. (“ChipMOS”); Chipbond Technology Corporation (“Chipbond”);
and Powertech Technology Inc. (“Powertech,” and together with ChipMOS and Chipbond, the “Comparison Group”).
In applying the market price method, Mr.
Ji-Sheng Chiu used SPIL’s recent public trading prices for SPIL Common Shares to evaluate the average market closing price
for 60, 90 and 180 business days (up to and including May 25, 2016) to calculate a range of theoretical values for SPIL Common
Shares as follows:
|
Items
|
Average
Closing Price
|
Theoretical
Price Range
|
|
Prices in NT$
|
Latest 60 business days
|
49.18
|
47.13 - 50.04
|
Latest 90 business days
|
50.04
|
Latest 180 business days
|
47.13
|
_________________________
|
Note:
|
Sources of ex-rights/ex-dividend adjusted closing prices
are from compilations of Taiwan Economic Journal (2015/8/28 - 2016/5/25); all average prices are calculated by simple arithmetic
averaging.
|
As shown in the table above, based on the
market price method, the theoretical value per SPIL Common Share falls in the range of NT$47.13 to NT$50.04, without taking any
adjusting factors into account.
In applying the price-to-book ratio
method, Mr. Ji-Sheng Chiu used the book value per SPIL Common Share and the average price-to-book value ratios of the Comparison
Group along with average closing prices for 180 days up to, and including, May 25, 2016, to calculate price-to-book value ratios
of the Comparison Group and to calculate a range of values for SPIL Common Shares as follows:
Comparing to Peer Companies
|
|
Average Closing
Prices in Latest 180 Business Days
|
|
Net Value
per Share for the First Half of 2016
|
|
Price
to-Book Value Ratio
|
|
|
|
Prices in NT$
|
|
ChipMOS
|
|
|
32.53
|
|
|
|
21.20
|
|
|
|
1.53
|
|
Chipbond
|
|
|
47.86
|
|
|
|
36.31
|
|
|
|
1.32
|
|
Powertech
|
|
|
66.98
|
|
|
|
44.48
|
|
|
|
1.51
|
|
_________________________
|
Note:
|
Sources of ex-rights/ex-dividend adjusted
closing prices are from compilations of Taiwan Economic Journal (2015/8/28 ‒ 2016/5/25);
all average prices are calculated by simple arithmetic averaging.
|
Items
|
|
Descriptions
|
|
|
Prices in NT$
|
Range of multipliers
|
|
1.32 ‒ 1.53 times
|
Net value per SPIL Common Share for the first quarter of 2016
|
|
23.23
|
Theoretical price range
|
|
30.66 ‒ 35.54
|
As shown in the table above, based on the
price-to-book value ratio method, the theoretical price per SPIL Common Share falls in the range of NT$30.66 to NT$35.54, without
taking any adjusting factors into account.
In applying the price-earnings ratio method,
Mr. Ji-Sheng Chiu applied the price to earnings per share ratios of the Comparison Group (based on earnings per share for the four
quarters ended March 31, 2016 and the average closing prices for 180 days up to, and including, May 25, 2016) to SPIL’s earnings
per share for the four quarters ended March 31, 2016, to calculate a range of values for SPIL Common Shares as follows:
Comparing to Peer Companies
|
|
Average Closing Prices in Latest 180 Business Days
|
|
Earnings per Share in the Four Quarters Ended March 31, 2016
|
|
Price-Earnings Ratio
|
|
|
|
Prices in NT$
|
|
ChipMOS
|
|
|
32.53
|
|
|
|
2.09
|
|
|
|
15.56
|
|
Chipbond
|
|
|
47.86
|
|
|
|
2.64
|
|
|
|
18.13
|
|
Powertech
|
|
|
66.98
|
|
|
|
5.37
|
|
|
|
12.47
|
|
_________________________
|
Note:
|
Sources of ex-rights/ex-dividend adjusted closing prices
are from compilations of Taiwan Economic Journal (2015/8/28 ‒2016/5/25); all average prices are calculated by simple
arithmetic averaging.
|
Item
|
Description
|
|
Prices in NT$
|
Range of multipliers
|
12.47 – 18.13 times
|
Consolidated earnings per SPIL Common Share
|
2.49
|
Theoretical price range
|
31.05 – 45.14
|
As shown in the table above, based on the
price to earnings per share ratio method, the theoretical price range per SPIL Common Share falls in the range of NT$31.05 to NT$45.14,
without taking any adjusting factors into account.
Mr. Ji-Sheng Chiu, after taking into account
certain non-quantitative key factors, weighted each of the three methods described above equally to obtain a theoretical price
per SPIL Common Share, as set forth below:
Evaluation Method
|
|
Price Range per SPIL
Common Share
|
|
Weight
|
|
Theoretical
Price Range per SPIL Common Share
|
|
|
Prices in NT$
|
|
Market price method
|
|
47.13 - 50.04
|
|
|
33.3%
|
|
|
|
36.28 - 43.57
|
|
Priceto-book ratio method
|
|
30.66 - 35.54
|
|
|
33.3%
|
|
|
|
|
|
Priceto-earnings ratio method
|
|
31.05 - 45.14
|
|
|
33.3%
|
|
|
|
|
|
Mr. Ji-Sheng Chiu then applied an adjustment
of 33.24% to account for the average premium paid in mergers involving the global semiconductor industry since the third quarter
of 2015. This premium rate was obtained from Bloomberg database by virtue of the following path: “MA”, sorted by (i)
period: near 12 months, (ii) trade type: MA, (iii) industry: semiconductor, and (iv) area: global. On May 25, 2016, the Bloomberg
database indicated that the quarterly premium of global merger and acquisition cases in semiconductor industry for the four quarters
since the third quarter of 2015 was 23.80%, 56.47%, 23.74% and 28.95%, respectively, and the average premium was 33.24%.
The adjusted price range per SPIL Common
Share is presented in the table below:
Evaluation
Method
|
|
Price
Range per SPIL Common Share
|
|
Adjusted
Price Range per SPIL Common Share
|
|
|
Prices in NT$
|
The weighted average of the results under the market price, price-to-book and the price-to-earnings methods
|
|
36.28 - 43.57
|
|
48.34 - 58.05
|
On the basis of this analysis, Mr. Ji-Sheng
Chiu concluded that, as of May 25, 2016, the reasonable price range per SPIL Common Share should be between NT$48.34 and NT$58.05
and the proposed exchange of each SPIL Common Share for NT$55 in cash pursuant to the Share Exchange was fair and reasonable.
Second Crowe Horwath Opinion
Consideration for ASE Common Shares
Mr. Ji-Sheng Chiu evaluated the proposed
exchange of each ASE Common Share for 0.5 HoldCo Common Shares pursuant to the Share Exchange. Mr. Ji-Sheng Chiu used the equity
attributable to owners of parent of ASE based on the audited or reviewed consolidated financial statements of ASE (NT$158,016,614,000
as of March 31, 2016) and the total issued ASE Common Shares based on the latest update from the Commerce and Industry Registration
Enquiry System of Department of Commerce, Ministry of Economic Affairs, Taiwan (7,918,272,896 as of April 26, 2016) to calculate
a net book value per share of NT$19.956. Under the Share Exchange, 7,918,272,896 ASE Common Shares would result in 3,959,136,448
HoldCo Common Shares as of the Effective Time. The net book value per HoldCo Common Share was calculated based on ASE’s
equity attributable to owners of parent as of March 31, 2016 to be NT$39.912 per share. Mr. Ji-Sheng Chiu concluded that the shareholders’
equity for the holders of HoldCo Common Shares would not be impaired in any way by the exchange ratio of 0.5 HoldCo Common Shares
for each ASE Common Share.
The fact that the net value of ASE’s
equity attributable to owners of parent as of the Effective Time may vary from that as of March 31, 2016 was also considered. However,
since the shareholders of ASE will contribute all the ASE Common Shares as of the Effective Time in exchange for all the HoldCo
Common Shares, Mr. Ji-Sheng Chiu concluded that the shareholders’ equity for the holders of HoldCo Common Shares will not
be affected as a result of the Share Exchange.
Based on this analysis, Mr. Ji-Sheng Chiu
concluded that, as of June 29, 2016, the proposed exchange of each ASE Common Share for 0.5 HoldCo Common Shares pursuant to the
Share Exchange was fair and reasonable.
Consideration for SPIL Common Shares
Mr. Ji-Sheng Chiu elected for a market
approach as the primary evaluation method while taking into account other non-quantitative factors to evaluate the reasonableness
of the proposed exchange of each SPIL Common Share for the Cash Consideration pursuant to the Share Exchange. Under the market
approach, Mr. Ji-Sheng Chiu adopted a (i) market price method that analyzed historical market prices of the SPIL Common Shares;
(ii) a price-book ratio method that applied the average price-to-book value ratios of the Comparison Group (as defined below)
to SPIL’s book value for the quarter ended March 31, 2016; and (iii) a price-to-earnings ratio method that applied the average
price to earnings per share ratios of the Comparison Group to SPIL’s earnings per share for the four quarters ended March
31, 2016. Mr. Ji-Sheng Chiu determined not to use an income approach, which requires using a company’s estimates for future
cash flows, because such an approach involves multiple assumptions and has a relatively higher level of uncertainty and lesser
objectivity as compared to other valuation methods. In addition, Mr. Ji-Sheng Chiu determined that a cost approach was not appropriate
for evaluation in light of SPIL’s operating model and capital structure, and therefore did not use such an approach.
Of the semiconductor manufacturing companies
listed on the TWSE, Mr. Ji-Sheng Chiu selected the Comparison Group for comparison based on relative similarities customer attributes,
business activities and business model.
In applying the market price method,
Mr. Ji-Sheng Chiu used SPIL’s recent public trading prices for SPIL Common Shares to evaluate the average market closing
price for 60, 90 and 180 business days (up to, and including, June 29, 2016) to calculate a range of theoretical values for SPIL
Common Shares as follows:
Items
|
Average
Closing Price
|
Theoretical
Price Range
|
|
Prices in NT$
|
Latest 60 business days
|
46.25
|
45.05 – 46.45
|
Latest 90 business days
|
46.45
|
Latest 180 business days
|
45.05
|
_________________________
|
Note:
|
Sources of ex-rights/ex-dividend adjusted closing prices
are from compilations of Taiwan Economic Journal (2015/10/5 - 2016/6/29); all average prices are calculated by simple arithmetic
averaging.
|
As shown in the table above, based on the
market price method, the theoretical value per SPIL Common Share falls in the range of NT$45.05 to NT$46.45, without taking any
adjusting factors into account.
In applying the price-to-book ratio
method, Mr. Ji-Sheng Chiu used the book value per SPIL Common Share and the average price-to-book value ratios of the Comparison
Group along with average closing prices for 180 days up to, and including, June 29, 2016 to calculate price-to-book value ratios
of the Comparison Group and to calculate a range of values for SPIL Common Shares as follows:
Comparing to Peer Companies
|
|
Average Closing
Prices in Latest 180 Business Days
|
|
Net Value
per Share for the First Half of 2016
|
|
Price-to-Book
Value Ratio
|
|
|
|
Prices in NT$
|
|
ChipMOS
|
|
|
32.53
|
|
|
|
21.20
|
|
|
|
1.53
|
|
Chipbond
|
|
|
46.86
|
|
|
|
36.31
|
|
|
|
1.29
|
|
Powertech
|
|
|
65.31
|
|
|
|
44.48
|
|
|
|
1.47
|
|
_________________________
|
Note:
|
Sources of ex-rights/ex-dividend adjusted closing prices
are from compilations of Taiwan Economic Journal (2015/10/5 - 2016/6/29); all average prices are calculated by simple arithmetic
averaging.
|
Items
|
Descriptions
|
|
Prices in NT$
|
Range of multipliers
|
1.29 – 1.53 times
|
Net value per SPIL Common Share for the first quarter of 2016
|
23.23
|
Theoretical price range
|
29.97 – 35.54
|
As shown in the table above, based on the
price-to-book value ratio method, the theoretical price per SPIL Common Share falls in the range of NT$29.97 to NT$35.54, without
taking any adjusting factors into account.
In applying the price-to-earnings ratio
method, Mr. Ji-Sheng Chiu applied the price to earnings per share ratios of the Comparison Group (based on earnings per share
for the four quarters ended March 31, 2016 and the average closing prices for 180 days up to, and including, June 29, 2016) to
SPIL’s earnings per share for the four quarters ended March 31, 2016 to calculate a range of values for SPIL Common Shares
as follows:
Comparing to Peer Companies
|
|
Average Closing Prices in Latest 180 Business Days
|
|
Earnings per Share in the Four Quarters Ended March 31, 2016
|
|
Price-Earnings Ratio
|
|
|
|
Prices in NT$
|
|
ChipMOS
|
|
|
32.53
|
|
|
|
2.09
|
|
|
|
15.56
|
|
Chipbond
|
|
|
46.86
|
|
|
|
2.64
|
|
|
|
17.75
|
|
Powertech
|
|
|
65.31
|
|
|
|
5.37
|
|
|
|
12.16
|
|
_________________________
|
Note:
|
Sources of ex-rights/ex-dividend adjusted closing prices
are from compilations of Taiwan Economic Journal (2015/10/5 - 2016/6/29); all average prices are calculated by simple arithmetic
averaging.
|
Item
|
|
Description
|
|
|
Prices in NT$
|
Range of multipliers
|
|
12.16 – 17.75 times
|
Consolidated earnings per SPIL Common Share
|
|
2.49
|
Theoretical price range
|
|
30.28 – 44.20
|
As shown in the table above, based on the
price to earnings per share ratio method, the theoretical price range per SPIL Common Share falls in the range of NT$30.28 to NT$44.20,
without taking any adjusting factors into account.
Mr. Ji-Sheng Chiu, after taking into account
certain non-quantitative key factors, weighted each of the three methods described above equally to obtain a theoretical price
per SPIL Common Share, as set forth below:
Evaluation Method
|
|
Price Range per SPIL
Common Share
|
|
Weight
|
|
Theoretical
Price Range per SPIL Common Share
|
|
|
Prices in NT$
|
|
Market price method
|
|
45.05 – 46.45
|
|
|
33.3%
|
|
|
|
35.10 – 42.06
|
|
Price-to-book ratio method
|
|
29.97 – 35.54
|
|
|
33.3%
|
|
|
|
|
|
Price-to-earnings ratio method
|
|
30.28 – 44.20
|
|
|
33.3%
|
|
|
|
|
|
Mr. Ji-Sheng Chiu then applied an adjustment
of 33.86% to account for the average premium paid in mergers involving the global semiconductor industry since the third quarter
of 2015. This premium rate was obtained from Bloomberg database by virtue of the following path: “MA”, sorted by (i)
period: near 12 months, (ii) trade type: MA, (iii) industry :semiconductor, and (iv) area: global. On June 29, 2016, the Bloomberg
database indicated that the quarterly premium of global merger and acquisition cases in semiconductor industry for the four quarters
since the third quarter of 2015 was 23.80%, 56.47%, 23.74% and 31.44%, respectively, and the average premium was 33.86%.
The adjusted price range per SPIL Common
Share is presented in the table below:
Evaluation
Method
|
|
Price
Range per SPIL Common Share
|
|
Adjusted
Price Range per SPIL Common Share
|
|
|
Prices in NT$
|
The weighted average of the results under the market price, price-to-book and the price-to-earnings methods
|
|
35.10 – 42.06
|
|
46.98 – 56.30
|
On the basis of this analysis, Mr. Ji-Sheng
Chiu concluded that, as of June 29, 2016, the reasonable price range per SPIL Common Share should be between NT$46.98 and NT$56.30
and the proposed exchange of each SPIL Common Share for the Cash Consideration pursuant to the Share Exchange was fair and reasonable.
Effects of the Share Exchange on ASE and SPIL
Private Ownership
SPIL ADSs are currently listed on NASDAQ
under the symbol “SPIL.” It is expected that, immediately following the completion of the Share Exchange, SPIL will
cease to be a publicly traded company and will instead become a privately held company wholly owned directly by HoldCo. Following
the completion of the Share Exchange, SPIL ADSs will cease to be listed on NASDAQ, and price quotations with respect to sales of
the SPIL ADSs in the public market will no longer be available. In addition, registration of the SPIL ADSs and the underlying SPIL
Common Shares under the Exchange Act, will be terminated. After the Effective Time, SPIL will no longer be required to file periodic
reports with the SEC or otherwise be subject to the U.S. federal securities laws, including the Sarbanes-Oxley Act, applicable
to public companies. After the completion of the Share Exchange, SPIL shareholders will no longer enjoy the rights or protections
that the U.S. federal securities laws provide.
Upon completion of the Share Exchange,
each SPIL Common Share issued immediately prior to the Effective Time, including the shares beneficially owned by ASE and
treasury shares of SPIL will be transferred to HoldCo in exchange for the right to receive the SPIL Common Shares Cash Consideration,
and each SPIL ADS, including the ADSs beneficially owned by ASE, will represent the right to receive, through the SPIL ADS
Depositary, the SPIL ADS Cash Consideration through SPIL ADS Depositary, respectively, without interest and net of any applicable
withholding taxes. As a result, current holders of SPIL Common Shares and SPIL ADS, will no longer have any equity interest in,
or be shareholders or American depositary shareholders of SPIL upon completion of the Share Exchange. As a result, holders of
SPIL Common Shares and SPIL ADSs will not have the opportunity to participate in the earnings and growth of SPIL and they will
not have the right to vote on corporate matters following the
completion
of the Exchange. Similarly, holders of SPIL Common Shares and SPIL ADSs will not be exposed to the risk of loss in relation to
their investment in SPIL.
Directors and Management of the Surviving
Company
Upon completion of the Share Exchange,
the directors of SPIL will continue to serve as directors for their respective terms, and ASE has undertaken to reelect or appoint
the SPIL directors whose terms end in June 2017, if they have not been found to violate their respective fiduciary duties. SPIL’s
chairman (being Mr. Bough Lin or his successor), and SPIL’s president (being Mr. Chi-Wen Tsai or his successor), are expected
to serve as directors of HoldCo. The directors of SPIL are also authorized to retain the executive officers of the SPIL as long
as the fiduciary duties of the directors can be discharged.
Primary Benefits and Detriments of the Share
Exchange
The primary benefits of the Share Exchange
to the holders of SPIL Common Shares and SPIL ADSs include, without limitation, the following:
|
·
|
the NT$55 per SPIL Common Share cash consideration and the NT$275 per SPIL ADS cash consideration offered to the holders of
SPIL Common Shares and SPIL ADSs, represent a premium of 8.9% and 12.3%, respectively, over the closing price of NT$50.5 per SPIL
Common Share and $7.52 per SPIL ADS, respectively, on May 25, 2016, the last trading day before the public announcement of the
execution of the Joint Share Exchange MOU, and a premium of 17.4% and 10.3%, respectively, over SPIL’s one-month and three-month
volume-weighted average price of NT$46.86 and NT$49.85, respectively, as quoted by the TWSE on the May 25, 2016, and a premium
of 19.7% and 11.6%, respectively, over SPIL’s one-month and three-month volume-weighted average price of $7.06 and $7.57,
respectively, as quoted by NASDAQ on May 25, 2016; and
|
|
·
|
the all-cash consideration, which will allow SPIL shareholders to immediately realize liquidity for their investment and provide
them with certainty of the value of their SPIL Common Shares or SPIL ADSs.
|
The primary detriments of the Share Exchange
to the holders of SPIL Common Shares and SPIL ADSs include, without limitation, the following:
|
·
|
the shareholders and ADS holders will have no ongoing equity participation in SPIL following the Share Exchange, and that they
will cease to participate in SPIL’s future earnings or growth, if any, or to benefit from increases, if any, in the value
of the SPIL Common Shares, and will not participate in any potential future sale of SPIL to a third party or any potential recapitalization
of SPIL which could include a dividend to shareholders;
|
|
·
|
the inability to participate in any potential future sale of part or all of SPIL following the Share Exchange to one or more
purchasers at a valuation higher than that being paid in the Share Exchange; and
|
|
·
|
the taxability of an all cash transaction to SPIL shareholders and ADS holders who are U.S. Holders (as defined below) for
U.S. federal income tax purposes.
|
The primary benefits of the Share Exchange
to ASE include the following:
|
·
|
the combination of ASE and SPIL under the holding company structure will allow both companies to better utilize their total
capacity to achieve broader service coverage across products and offer more innovative and complete solutions to their customers;
|
|
·
|
the combination of ASE and SPIL will allow each company to have better insights to semiconductor customers and end markets
to enable more accurate forecasting of customer demand and facilitate better planning and capacity investment, which would in turn
allow ASE and SPIL the ability to execute and deliver on its business plans throughout the business cycle and in a semiconductor
industry that is highly competitive, cyclical and subject to constant and rapid technological change;
|
|
·
|
the expectation
that the larger-scale organization, greater marketing resources and financial strength
of HoldCo will lead to improved opportunities for marketing and cross-selling ASE’s
and SPIL’s products after the combination; and
|
|
·
|
ASE’s current shareholders will own approximately the same ownership and voting interest in HoldCo following the completion
of the Share Exchange.
|
The primary detriments of the Share Exchange
to ASE include the following:
|
·
|
the difficulty and costs inherent in consolidating resources in ASE and SPIL under the holding company structure and the risk
that anticipated strategic and other benefits to ASE and SPIL following completion of the Share Exchange, including the estimated
cost savings and cost synergies described above, will not be realized or will take longer to realize than expected; and
|
|
·
|
as to the
Cash Consideration paid to SPIL shareholders in the Share Exchange, the financial interests
of ASE are different from the financial interests of SPIL shareholders.
|
SPIL’s Net Book Value and Net Earnings
The table below sets out the indirect interest
in SPIL’s net book value and net earnings for ASE before and after the Share Exchange, based on the historical net book value
and net earnings of SPIL as of and for the year ended December 31, 2015.
Name
|
Ownership
Prior to the Share Exchange
|
Ownership
After the Share Exchange
|
|
Net
Book Value
|
Earnings
|
Net
Book Value
|
Earnings
|
|
(in millions)
|
%
|
(in millions)
|
%
|
(in millions)
|
%
|
(in millions)
|
%
|
NT$
|
US$
|
NT$
|
US$
|
NT$
|
US$
|
NT$
|
US$
|
ASE
|
21,113.2
|
675.2
|
33.29
|
2,414.7
|
77.2
|
33.29
|
63,422.0
|
2,028.2
|
100.00
|
7,253.5
|
232.0
|
100.00
|
Alternatives to the Share Exchange
Following the concerns reflected in ASE’s
November 16, 2015 amendment to its report on Schedule 13D, ASE considered a number of alternative structures and approaches in
order to maximize the value of its investment in SPIL. These alternatives involved launching the Second ASE Tender Offers or acquiring
additional SPIL Common Shares through one or more market purchases or through one or more further tender offers. In addition, had
the Second ASE Tender Offers been successfully consummated, ASE had intended to seek to discharge the SPIL Board at one or more
shareholders’ meetings or await the expiration of the current SPIL Board’s term and elect new nominees to the SPIL
Board, and to subsequently cause the SPIL Board to resolve in favor of a transaction proposed by ASE.
Following the commencement of discussions
and negotiations between ASE and SPIL in April 2016, the boards and senior management of ASE and SPIL and their respective advisors
considered alternative ways of structuring the transaction, including a direct acquisition by ASE of all SPIL Common Shares and
SPIL ADSs. However, the boards and senior management of each of ASE and SPIL concluded that the Share Exchange and establishment
of HoldCo was the best way to incentivize healthy internal competition and promote cooperation, improve each company’s operating
efficiency, economies of scale as well as enhance research and development and innovation, and thereby create an environment of
mutual assistance and win-win mentality, strengthening competitiveness and improving the performance of HoldCo, with the main goals
of improving the quality of customer service, creating shareholders’ value and benefiting the employees.
Plans for SPIL after the Share Exchange
After the Effective Time, ASE and SPIL
will become wholly owned subsidiaries of HoldCo. Prior to and upon completion of the Share Exchange, ASE and SPIL will own and
continue to conduct their respective businesses that they currently conduct in substantially the same manner.
Other than as described in this proxy statement/prospectus,
there are no present plans or proposals that relate to or would result in any of the following:
|
·
|
an extraordinary corporate transaction involving SPIL’s corporate structure, business, or management, such as a merger,
reorganization, liquidation or relocation of any material operations
;
|
|
·
|
sale or transfer of a material amount of assets of SPIL or any of its subsidiaries; or
|
|
·
|
any other material changes in SPIL’s business.
|
Upon the establishment of HoldCo, HoldCo’s
board will continue to evaluate the entire business and operations of HoldCo from time to time, and may propose or develop plans
and proposals which it considers to be in the best interests of HoldCo and its shareholders, including the disposition or acquisition
of material assets, alliances, joint ventures, and other forms of cooperation with third parties or other extraordinary transactions.
Board of Directors and Management of HoldCo Following Completion
of the Share Exchange
HoldCo will not come into existence before
the Effective Time. The ASE EGM will function as the HoldCo incorporators’ meeting by operation of law. Therefore, at the
ASE EGM, shareholders of ASE will elect the members of the board of directors and supervisors of HoldCo.
Under the terms of the Joint Share
Exchange Agreement, at the HoldCo incorporators’ meeting, nine to 13 directors and three supervisors will be elected for
HoldCo, which terms of such directors and supervisors will start from Effective Time. SPIL’s Chairman and President should
be appointed as directors of HoldCo. After completion of the Share Exchange, subject to ASE shareholders’ adoption of the
HoldCo director and supervisor election proposals, the board of directors of HoldCo is expected to include Jason C.S. Chang (management
director, Chairman), Richard H.P. Chang (management director, Vice-Chairman), Bough Lin (management director),Chi-Wen Tsai (management
director), Rutherford Chang (management director), Tien Wu (management director), Joseph Tung (management director), Raymond Lo
(management director),Tien-Szu Chen (management director),Jeffrey Chen (management director) and Freddie Liu (non-management director).
Alan Cheng, Yuan-Chuang Fung and Fang-Yin Chen are expected to be the supervisors of HoldCo. It is expected that Jason C.S. Chang
will be appointed as Chief Executive Officer and Joseph Tung will be appointed as Chief Financial Officer of HoldCo.
From and after the Effective Time,
the board of directors of HoldCo will establish an audit committee, which will consist of one non-management director, Freddie
Liu, who is expected to be independent under Rule 10A-3 of the Exchange Act and financially literate with accounting or related
financial management expertise. ASE is currently, and upon completion of the Share Exchange, HoldCo will be, subject to NYSE corporate
governance requirements, as applicable to foreign private issuers. It is expected that the audit committee of HoldCo established
at the Effective Time would satisfy and comply with the requirements of section 303A.06 of the NYSE Listing Company Manual.
The following table sets forth information
regarding all of the expected directors, supervisors and senior management of HoldCo as of the Effective Time. In accordance with
ROC law, each of our directors and supervisors is elected either in his or her capacity as an individual or as an individual representative
of a corporation or government. Persons designated to represent corporate or government shareholders as directors are typically
nominated by such shareholders at the annual general meeting and may be replaced as representatives by such shareholders at will.
Of HoldCo’s directors, it is expected that eight will represent ASEE. The remaining directors and supervisors serve in their
capacity as individuals.
Name
|
Position
|
Age
|
Other
Significant
Positions Held Outside of the HoldCo
|
Jason
C.S. Chang
(1)(2)
|
Management
director, Chairman and Chief Executive Officer of HoldCo
|
73
|
None
|
Richard
H.P. Chang
(1)
|
Management
director and Vice-Chairman of HoldCo
|
70
|
Chairman,
Sino Horizon Holdings Ltd.
|
Bough
Lin
(2)
|
Management
director of HoldCo
|
65
|
None
|
Chi-Wen
Tsai
(2)
|
Management
director of HoldCo
|
69
|
None
|
Rutherford
Chang
(3)
|
Management
director of HoldCo
|
37
|
None
|
Tien
Wu
(2)
|
Management
director of HoldCo
|
60
|
None
|
Joseph
Tung
(2)
|
Management
director and Chief Financial Officer of HoldCo
|
59
|
Independent
director, Ta Chong Bank Ltd.
|
Raymond
Lo
(2)
|
Management
director of HoldCo
|
63
|
None
|
Tien-Szu
Chen
(2)
|
Management
director of HoldCo
|
56
|
None
|
Jeffrey
Chen
(2)
|
Management
director of HoldCo
|
53
|
Independent
Director and a member of the compensation committee, Mercuries & Associates Holding Ltd; director, Jiangsu Longchen
Greentech Co., Ltd.
|
Freddie
Liu
|
Non-management
director and audit committee member of HoldCo
|
53
|
Chief
strategy officer, TPK Holding Co., Ltd.
|
Alan
Cheng
|
Supervisor
of HoldCo
|
72
|
Chairman,
HR Silvine Electronics, Inc.
|
Yuan-Chuang
Fung
|
Supervisor
of HoldCo
|
88
|
Director,
Accton Technology Corporation
|
Fang-Yin
Chen
|
Supervisor
of HoldCo
|
51
|
Director
and vice president of finance department, Hung Ching Development & Construction Co. Ltd.
|
|
(1)
|
Jason C.S. Chang and Richard H.P. Chang are brothers.
|
|
(2)
|
Representative of ASEE, a company organized under the laws of Hong Kong, which held 15.7% of ASE’s total outstanding
shares as of November 30, 2017, and is expected to hold approximately 15.7% of HoldCo’s total outstanding shares as
of the Effective Time. All of the outstanding shares of ASEE are held through intermediary holding companies and under a revocable
trust for the benefit of Jason C.S. Chang and his family.
|
|
(3)
|
Rutherford Chang is the son of Jason C.S. Chang.
|
Jason
C.S. Chang
is expected to be elected as a management director and Chairman and appointed as Chief Executive Officer of HoldCo.
Mr. Chang has served as Chairman of
ASE
since its founding in March 1984 and as its
Chief Executive Officer since May 2003. Mr. Chang holds a bachelor’s degree in electrical engineering from National Taiwan
University and a master’s degree from the Illinois Institute of Technology. He is the brother of Richard H.P. Chang,
ASE’s
Vice-Chairman and President.
Richard
H.P. Chang
is expected to be elected as a management director and Vice-Chairman of HoldCo. Mr. Chang has served as Vice-Chairman
of
ASE
since November 1999 after having served as President of
ASE
since
its founding in March 1984, and served as Chief Executive Officer of
ASE
from July
2000 to April 2003. In February 2003, he was again appointed President of
ASE
upon
the retirement of Mr. Leonard Y. Liu. Mr. Chang has also served as the Chairman of Universal Scientific Industrial (Shanghai) Co., Ltd.
since June 2008. Mr. Chang holds a bachelor’s degree in industrial engineering from Chung Yuan Christian University
in Taiwan. He is the brother of Jason C.S. Chang, ASE’s Chairman and Chief Executive Officer.
Bough Lin
is
expected to be elected as a management director of HoldCo.
Dr. Lin has served as Chairman and director of SPIL since
August 1984. Dr. Lin also serves as a director of SPIL (B.V.I.) Holding Ltd. and Siliconware U.S.A., Inc., as
SPIL’s representative. Dr. Lin holds a bachelor’s degree in electronic physics from National Chiao Tung
University in Taiwan and was also awarded an honorary Ph.D. from National Chiao Tung University in Taiwan.
Chi-Wen Tsai
is
expected to be elected as a management director of HoldCo. Mr. Tsai
has served as Vice-Chairman, a director and
President of SPIL since August 1984. Mr. Tsai also serves as a director of SPIL (Cayman) Holding Ltd., Siliconware
Technology (Suzhou) Ltd., Siliconware Electronics (Fujian) Co., Limited and Siliconware U.S.A., Inc., as SPIL’s
representative. Mr. Tsai holds a bachelor’s degree in electrical engineering from the National Taipei Institute of
Technology in Taiwan.
Rutherford
Chang
is expected to be elected as a management director of HoldCo. Mr. Chang has served as a director of
ASE
since
June 2009 and General Manager of China Region of
ASE
since June 2010. He joined
ASE
group
in March 2005. Mr. Chang holds a bachelor’s degree in psychology from Wesleyan
University in Connecticut. He is the son of Jason C.S. Chang, ASE’s Chairman and Chief Executive Officer.
Tien
Wu
is expected to be elected as a management director of HoldCo. Dr. Wu has served as a director of
ASE
since
June 2003 and Chief Operating Officer of ASE since April 2006, prior to which he served as the President of Worldwide Marketing
and Strategy of the ASE group. Prior to joining ASE Inc. in March 2000, Dr. Wu held various managerial positions with IBM.
Dr. Wu holds a bachelor’s degree in civil engineering from National Taiwan University in Taiwan, a master’s degree
and a
Ph.D.
degree in mechanical engineering and applied mechanics from the University
of Pennsylvania. See “Recent Development.”
Joseph
Tung
is expected to be elected as a management director and appointed as the Chief Financial Officer of HoldCo. Mr. Tung has
served as a director of
ASE
since April 1997 and Chief Financial Officer of ASE since
December 1994. He is also an independent director of Ta Chong Bank Ltd. since October 2007. Before joining ASE, Mr. Tung
was a vice president at Citibank, N.A. Mr. Tung holds a bachelor’s degree in economics from the National Chengchi University
in Taiwan and a master’s degree in business administration from the University of Southern California.
Raymond
Lo
is expected to be elected as a management director of HoldCo. Mr. Lo has served as a director of
ASE
since
May 2006 and General Manager of ASE’s packaging facility in Kaohsiung, Taiwan since April 2006. Before joining ASE group,
Mr. Lo was the Director of Quality Assurance at Zeny Electronics Co. Mr. Lo holds a bachelor’s degree in electronic
physics from the National Chiao Tung University in Taiwan.
Tien-Szu
Chen
is expected to be elected as a management director of HoldCo. Mr. Chen has served as a director of ASE since June 2015
and General Manager of ASE Chung-Li branch since August 2015. Prior to his current position, Mr. Chen served as ASE’s
supervisor from June 2006 to June 2015 and as President of Power ASE Technology Inc. from June 2006 to May 2012. He also
held several key management positions within the ASE group from June 1988 to June 2006, including President of ASE Chung-Li branch
and Senior Vice President of ASE. Prior to joining ASE group in June 1988, Mr. Chen worked at TSMC and Philips Semiconductor
Kaohsiung. Mr. Chen holds a bachelor’s degree in industrial engineering from Chung Yuan Christian University in Taiwan.
Jeffrey
Chen
is expected to be elected as a management director of HoldCo. Mr. Chen has served as a director of ASE since June 2003
and as General Manager of China Headquarters of ASE. Prior to joining ASE, he worked in the corporate banking department of Citibank,
N.A. in Taipei and as a vice president of corporate finance at Bankers Trust in Taipei. Mr. Chen holds a bachelor’s
degree in finance and economics from Simon Fraser University in Canada and a master’s degree in business administration
from the University of British Columbia in Canada.
Freddie Liu
is expected to be
elected as a non-management director and a member of the audit committee of HoldCo. Mr. Liu also serves as the chief strategy
officer of TPK Holding Co., Ltd. and has served as chief financial officer and vice president of TPK Holding Co., Ltd. from September
2009 to August 2017. Prior to joining TPK Holding Co., Ltd., Mr. Liu served as the vice president of finance at ASE from 1997
to 2009. Prior to that, Mr. Liu served as a vice president at Citibank. He received a master’s degree in business administration
from the University of Michigan.
Alan Cheng
is expected to be
elected as a supervisor of HoldCo. Mr. Cheng also serves as chairman of HR Silvine Electronics, Inc. and a supervisor at ASE Test,
Inc. Mr. Cheng holds a degree in industrial engineering from Chung Yuan Christian University in Taiwan and a master’s degree
in industrial engineering from Rhode Island University.
Yuan-Chuang Fang
is expected
to be elected as a supervisor of HoldCo. Mr. Fung also serves as a director of Accton Technology Corporation and was a director
of Claridy Solution, Inc. as well as a general manager of Wang Laboratories Taiwan. Mr. Fung holds a bachelor’s degree in
engineering from Purdue University.
Fang-Yin Chen
is expected to
be elected as a supervisor of HoldCo. Mrs. Chen also serves as a director and vice president of finance department of Hung Ching
Development & Construction Co. Ltd. Prior to joining Hung Ching Development & Construction Co. Ltd., Mrs. Chen worked
at Deloitte Taiwan from September 1988 to June 1992. Mrs. Chen holds a bachelor’s degree in Accounting from Tamkang University
in Taiwan.
Under ROC law, companies that are newly
incorporated by way of a statutory share exchange under the ROC Mergers and Acquisitions Act, including the Share Exchange, may
only elect independent directors
after
the new holding company has been incorporated and that a separate shareholders’
meeting has to be called upon to elect the independent directors. Therefore, it is expected that HoldCo will hold another shareholders’
meeting within a certain period after the Effective Time to elect the independent directors of HoldCo. The newly elected independent
directors of HoldCo are expected to satisfy the independence standards under Rule 10A-3 of the Exchange Act as well as the independence
standards under TWSE listing rules. It is expected that the three supervisors and the one non-management director previously elected
at ASE EGM will retire from HoldCo at the time the new independent directors are elected. The audit committee of HoldCo will also
be composed exclusively of the newly elected independent directors. It is expected that the extraordinary shareholders’
meeting of HoldCo to elect the new independent directors will take place on or after [DATE], 2018.
Financing of the Share Exchange
HoldCo intends to fund the Cash Consideration,
which is an aggregate amount of approximately NT$173.16 billion (US$5.71 billion) (including the NT$51.2 per SPIL Common Share
Cash Consideration payable to holders of the SPIL Convertible Bonds that have not been otherwise redeemed or repurchased by the
SPIL, or cancelled or converted prior to the Effective Time), with a combination of ASE’s cash on hand and debt financing.
Subject to the amount of cash on hand at the time that ASE arranges for financing, ASE may arrange bank loans up to NT$173 billion
(US$5.70 billion) with a combination of a syndication loan of NT$120 billion (US$3.96 billion) and a short-term bridge loan of
NT$53 billion (US$1.75 billion). In a highly confident letter dated November 7, 2016, issued by Citibank to ASE, Citibank stated
that it is highly confident of its ability to arrange debt facilities for the Share Exchange up to an amount of US$3.8 billion
equivalent. In another highly confident letter dated November 16, 2016, issued by DBS to ASE, DBS stated that it is confident
of its ability to arrange debt facilities for the Share Exchange up to an amount of NT$53 billion (US$1.75 billion). Both highly
confident letters contained certain customary conditions to the arrangement of such facilities, including the following material
conditions: (i) the applicable bank being appointed as the bookrunner and arranger of the facility, (ii) completion of customary
due diligence with the results being satisfactory to the applicable bank, (iii) final agreement on the pricing, terms and conditions
for the facility, (iv) negotiation, execution and delivery of financing documentation in form and substance satisfactory to the
applicable bank, (v) receipt of all relevant approvals in connection with the Share Exchange, including approval of the credit
committee of the applicable bank, (vi) consummation of the Share Exchange on terms and conditions satisfactory to the applicable
bank, and (vii) market conditions at the relevant time being satisfactory to the applicable bank.
In addition, on December 8, 2016, the
ASE Board approved a capital increase in which ASE offered 300 million new ASE Common Shares, par value NT$10 per share. The subscription
price was later set at NT$34.3 (US$1.13) per share and the total amount of proceeds of such capital increase was NT$10.29 billion
(US$339.27 million). Eighty percent of such new ASE Common Shares was subscribed for by ASE’s existing shareholders on a
pro rata basis, ten percent of such new ASE Common Shares was subscribed for by ASE’s employees and the remaining ten percent
of such new ASE Common Shares was sold to the general public in Taiwan. On December 16, 2016, ASE filed with the SEC a registration
statement on Form F-3 and a preliminary prospectus supplement in connection with the Rights Offering. On February 3, 2017 and
March 28, 2017, ASE filed with the SEC a prospectus supplement on Form 424B5 in connection with the Rights Offering. ASE used
the proceeds of the capital increase to reduce or retire existing indebtedness, which improved its capital position and free up
its borrowing capacity to facilitate the incurrence of indebtedness to finance the Share Exchange.
Certain ROC and U.S. Federal Income Tax Consequences of
the Share Exchange for Holders of ASE Common Shares or ADSs
ROC Taxation
The following is a summary of the principal
ROC tax consequences of the Share Exchange and the ownership of HoldCo Common Shares to a non-resident individual or non-resident
entity that owns ASE Common Shares and ultimately HoldCo Common Shares (a “non-ROC holder”) on the assumption that
HoldCo Common Shares will be listed on the TWSE as scheduled. As used in the preceding sentence, a “non-resident individual”
is a non-ROC national who owns ASE Common Shares or HoldCo Common Shares, as the case may be, and is not physically present in
the ROC for 183 days or more during any calendar year, and a “non-resident entity” is a corporation or a non-corporate
body that owns ASE’s common shares or HoldCo Common Shares, as the case may be, is organized under the law of a jurisdiction
other than the ROC and has no fixed place of business or business agent in the ROC.
The statements regarding ROC tax laws set
forth below are based on the laws in force and applicable as of the date hereof, which are subject to change, possibly on a retroactive
basis.
This summary is not exhaustive of all possible
tax considerations, which may apply to a particular non-ROC holder and potential non-ROC holders are advised to satisfy themselves
as to the overall tax consequences of the acquisition, ownership and disposition of HoldCo Common Shares, including specifically
the tax consequences under ROC law, the laws of the jurisdiction of which they are residents, and any tax treaty between ROC and
their country of residence, by consulting their own tax advisors.
Tax Consequences Arising from the Share
Exchange
Securities Transaction Tax
In the view of Baker & McKenzie,
by reasonable interpretation of the ROC Mergers and Acquisitions Act based on current rules and regulations promulgated by ROC
tax authority, ASE’s shareholders should not be subject to the ROC securities transaction tax upon the Share Exchange since
such shareholders will receive solely HoldCo Common Shares (including those represented by HoldCo ADSs) as consideration for the
Share Exchange. However, we cannot assure you that the ROC tax agency will agree. A transfer of shares in a share exchange is
exempted from the securities transaction tax if at least 65% of the total consideration to be paid to shareholders is paid in
certain equity shares, such as the HoldCo Common Shares (including those represented by HoldCo ADSs). If, contrary to the view
of Baker & McKenzie, the ROC tax agency successfully takes a different position and interprets the ROC Mergers and Acquisitions
Act in a manner that the ROC tax agency considers the Cash Consideration as part of such total consideration, the share consideration
paid to ASE shareholders will be lower than the 65% threshold and a securities transaction tax of 0.3% would be imposed on the
transaction price of the Share Exchange. HoldCo intends to issue the share consideration to ASE shareholders at the Effective
Time without deducting or withholding any ROC securities transaction tax. See the section entitled “Risk Factors —
Risks Relating to Owning HoldCo ADSs — A different view of the ROC tax agency from our current treatment of the ROC securities
transaction tax might cause tax uncertainties to HoldCo shareholders” for further discussion.
Capital gains
Capital gains realized upon the Share Exchange
are exempted from ROC income tax.
Tax Consequences of Owning HoldCo Common
Shares
Dividends
Dividends (whether in cash or common shares)
declared by HoldCo out of retained earnings and distributed to a non-ROC holder are subject to ROC withholding tax, currently at
a rate of 20% (unless a preferable tax rate is provided under a tax treaty between the ROC and the jurisdiction where the non-ROC
holder is a resident) on the amount of the distribution (in the case of cash dividends) or on the par value of the distributed
common shares (in the case of stock dividends). A 10% undistributed earning tax is imposed on a ROC company for its after-tax earnings
generated after January 1, 1998 that are not distributed in the following year. The undistributed earning tax so paid by the ROC
company will reduce the retained earnings available for future distributions. When HoldCo declares a dividend out of those retained
earnings, an amount in respect of the undistributed earnings tax, up to a
maximum
amount of 5% of the dividend to be distributed, will be credited against the withholding tax imposed on the non-ROC holders.
Distributions of stock dividends out of
capital reserves will not be subject to withholding tax, except under limited circumstances.
Capital Gains
Starting from January 1, 2016, capital
gains realized upon the sale or other disposition of common shares are exempt from ROC income tax.
Sales of ADSs are not regarded as sales
of ROC securities and thus any gains derived from transfers of ADSs by non-ROC holders are not currently subject to ROC income
tax.
Securities Transaction Tax
Securities transaction tax will be imposed
on the seller at the rate of 0.3% of the transaction price upon a sale of common shares. Transfers of American depositary shares
are not subject to the ROC securities transaction tax.
Subscription Rights
Distributions of statutory subscription
rights for HoldCo Common Shares in compliance with the ROC Company Law are currently not subject to ROC tax. Sales of statutory
subscription rights evidenced by securities are subject to the securities transaction tax, currently at the rate of 0.3% of the
gross amount received. Proceeds derived from sales of statutory subscription rights, which are not evidenced by securities, are
not subject to securities transaction tax but are subject to income tax at a fixed rate of 20% of the income if the seller is a
non-ROC holder regardless of whether the non-ROC holder is an individual or entity. Subject to compliance with ROC laws, HoldCo,
in its sole discretion, may determine whether statutory subscription rights are evidenced by securities.
Estate and Gift Tax
ROC estate tax is payable on any property
within the ROC left by a deceased non-resident individual, and ROC gift tax is payable on any property within the ROC donated by
a non-resident individual. Estate tax and gift tax are currently imposed at the rate of 10%. Under the ROC Estate and Gift Tax
Act, common shares issued by ROC companies are deemed located in the ROC without regard to the location of the owner. It is unclear
whether a holder of ADSs will be considered to own common shares for this purpose.
Tax Treaty
At present, the ROC has income tax
treaties with Indonesia, Singapore, New Zealand, Australia, the United Kingdom, South Africa, the Gambia, Swaziland, Malaysia,
Macedonia, the Netherlands, Senegal, Sweden, Belgium, Denmark, Israel, Vietnam, Paraguay, Hungary, France, India, Slovakia, Switzerland,
Germany, Thailand, Kiribati, Luxembourg, Austria, Italy, Japan and Poland. These tax treaties may limit the rate of ROC withholding
tax on dividends paid with respect to common shares issued by ROC companies. If a non-ROC holder of ADSs successfully proves to
the ROC tax agency that he/she is the beneficial owner of common shares, such non-ROC holder will be considered as the beneficial
owner of common shares for the purposes of such treaties. Holders of ADSs who wish to apply a reduced withholding tax rate that
is provided under a tax treaty should consult their own tax advisers concerning such application. The United States does not have
an income tax treaty with the ROC.
United States Taxation
In the opinion of Davis Polk & Wardwell
LLP, the following are material U.S. federal income tax consequences to the U.S. Holders described below of the Share Exchange
and of owning and disposing of HoldCo ADSs or HoldCo Common Shares received in the Share Exchange, but it does not purport to be
a comprehensive description of all tax considerations that may be relevant to a particular person’s decision to participate
in the Share Exchange or own or dispose of such securities. This discussion applies only to U.S. Holders who hold ASE ADSs or ASE
Common Shares, and will hold HoldCo ADSs or HoldCo Common Shares, as capital assets for U.S. federal income tax purposes. Except
as otherwise stated, references to ADSs or Common Shares in this discussion refer to ASE ADSs or Common Shares prior to the Share
Exchange and HoldCo ADSs or Common Shares thereafter. In addition,
it
does not describe all of the tax consequences that may be relevant in light of a U.S. Holder’s particular circumstances,
including alternative minimum tax consequences or the Medicare contribution tax on net investment income, and tax consequences
applicable to U.S. Holders subject to special rules, such as:
|
·
|
certain financial institutions;
|
|
·
|
dealers or certain traders in securities;
|
|
·
|
persons holding ADSs or Common Shares as part of a “straddle” or integrated transaction or similar transaction
or persons entering into a constructure sale with respect to ADSs or Common Shares;
|
|
·
|
persons whose functional currency for U.S. federal income tax purposes is not the U.S. dollar;
|
|
·
|
entities classified as partnerships for U.S. federal income tax purposes;
|
|
·
|
persons that own or are deemed to own 10% or more of our voting stock;
|
|
·
|
persons who acquired or received ADSs or Common Shares pursuant to the exercise of an employee stock option or otherwise as
compensation; or
|
|
·
|
persons holding ADSs or Common Shares in connection with a trade or business conducted outside the United States.
|
In addition, this discussion does not address
the U.S. federal income tax consequences to a person that will own, actually or constructively, 5% or more of the total voting
power or the total value of HoldCo stock immediately after the Share Exchange. Any such person should consult its tax adviser concerning
the U.S. federal income tax consequences of the Share Exchange in light of its particular circumstances, including the requirement
to enter into a gain recognition agreement with the U.S. Treasury in order to defer the recognition of any gain realized on the
Share Exchange.
If an entity that is classified as a partnership
for U.S. federal income tax purposes owns HoldCo ADSs or Common Shares, the U.S. federal income tax treatment of a partner will
generally depend on the status of the partner and the activities of the partnership. Entities classified as partnerships for U.S.
federal income tax purposes and their partners should consult their tax advisers as to the particular U.S. federal income tax consequences
of the Share Exchange and owning and disposing of the ADSs or Common Shares.
This discussion is based on the U.S. Internal
Revenue Code of 1986, as amended (the “Code”), administrative pronouncements, judicial decisions and final, temporary
and proposed Treasury Regulations, all as of the date hereof and changes to any of which subsequent to the date of this proxy statement/prospectus
may affect the tax consequences described herein, possibly with retroactive effect. This discussion is also based, in part, on
representations by ASE, the ASE Depositary and the HoldCo Depositary and assumes that each representation by ASE is and will remain
true through the date of the Share Exchange and each obligation under the HoldCo Deposit Agreement and any related agreement will
be performed in accordance with their terms.
As used herein, a “U.S. Holder”
is a beneficial owner of ASE ADSs, ASE Common Shares, HoldCo ADSs or HoldCo Common Shares that is, for U.S. federal income tax
purposes:
|
·
|
a citizen or individual resident of the United States;
|
|
·
|
a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States, any
state therein or the District of Columbia; or
|
|
·
|
an estate or trust the income of which is subject to U.S. federal income taxation regardless of its source.
|
In general, a U.S. Holder who owns American
depositary shares will be treated as the owner of the underlying common shares represented by those American depositary shares
for U.S. federal income tax purposes. Accordingly,
no
gain or loss will be recognized if a U.S. Holder exchanges ADSs for the underlying Common Shares represented by the relevant American
depositary shares.
The U.S. Treasury has expressed concerns
that parties to whom American depositary shares are released before the underlying shares are delivered to the depositary (“pre-release”),
or intermediaries in the chain of ownership between holders of American depositary shares and the issuer of the security underlying
the American depositary shares, may be taking actions that are inconsistent with the claiming of foreign tax credits by holders
of American depositary shares. These actions would also be inconsistent with the claiming of the reduced rate of tax, described
below, applicable to dividends received by certain non-corporate holders. Accordingly, the creditability of ROC taxes, and the
availability of the reduced tax rate for dividends received by certain non-corporate U.S. Holders, each described below, could
be affected by actions taken by such parties or intermediaries.
U.S. Holders should consult their tax advisers
concerning the U.S. federal, state, local, and foreign tax consequences of the Share Exchange and of owning and disposing of ADSs
or Common Shares in their particular circumstances.
Exchange of ADSs or common shares pursuant
to the Joint Share Exchange Agreement
General
Except as otherwise described below under
“— Passive Foreign Investment Company Rules,” a U.S. Holder will not recognize any gain or loss for U.S. federal
income tax purposes on the exchange of ASE ADSs or ASE Common Shares for HoldCo ADSs or HoldCo Common Shares, respectively, pursuant
to the Joint Share Exchange Agreement, except to the extent of cash received in lieu of an entitlement to receive a fractional
HoldCo ADS or a fractional HoldCo Common Share (a “fractional entitlement”) or cash received by a dissenting U.S. Holder,
as described below. A U.S. Holder’s aggregate tax basis in its HoldCo ADSs or HoldCo Common Shares received pursuant to the
Share Exchange will equal the aggregate tax basis that the U.S. Holder had in the ASE ADSs or ASE Common Shares immediately prior
to the Share Exchange, less any tax basis that is allocable to a fractional entitlement. A U.S. Holder’s holding period for
the HoldCo ADSs or HoldCo Common Shares received in the Share Exchange will include the holding period for the ASE ADSs or ASE
Common Shares exchanged.
A U.S. Holder who receives cash in lieu
of a fractional entitlement will recognize capital gain or loss in an amount equal to the difference between the amount of cash
received and the tax basis allocable to such fractional entitlement. Such capital gain or loss will be long-term capital gain or
loss if, as of the date of the Share Exchange, the U.S. Holder’s holding period for the relevant fractional entitlement exceeds
one year.
Passive Foreign Investment Company Rules
As indicated in ASE’s filings on
Form 20-F, ASE believes that it has not been a PFIC for U.S. federal income tax purposes for any taxable year since the ASE ADSs
were listed for trading on the NYSE in 2000, and ASE does not expect to be a PFIC for its current taxable year. However, ASE has
not considered its PFIC status for any prior taxable year and ASE cannot provide assurance that it has not been a PFIC for any
taxable year. Further, as discussed under “Tax Consequences of Owning HoldCo ADSs and HoldCo Common Shares—Passive
Foreign Investment Company Rules” below, HoldCo does not expect to be a PFIC for the current taxable year or in the foreseeable
future. Under proposed Treasury regulations that are not yet effective but are proposed to be effective from April 11, 1992, if
(i) ASE were a PFIC for any taxable year during which a U.S. Holder owned ASE ADSs or ASE Common Shares and (ii) HoldCo is not
a PFIC for the taxable year that includes the day after the Share Exchange, then, notwithstanding the general U.S. federal income
tax treatment of the Share Exchange described above, the U.S. Holder would be required to recognize any gain realized on the exchange
of ASE ADSs or ASE Common Shares for HoldCo ADSs or HoldCo Common Shares. Such gain would be allocated ratably over the U.S. Holder’s
holding period for the ASE ADSs or HoldCo Common Shares, as the case may be. The amounts allocated to the taxable year of the Share
Exchange and to any year before ASE became a PFIC would be taxed as ordinary income. The amount allocated to each other taxable
year would be subject to tax at the highest rate in effect for individuals or corporations, as appropriate, for that taxable year,
and an interest charge would be imposed on the tax on such amounts. U.S. Holders should consult their tax advisers regarding whether
ASE may have been a PFIC in any year during which the U.S. Holder has held ASE ADSs or Common Shares and the U.S. federal income
tax consequences of the Share Exchange to the U.S. Holder.
Dissenting U.S. Holders
Provided that ASE was not a PFIC for
any taxable year during which a U.S. Holder who exercises its dissenter’s rights (a “dissenting U.S. Holder”)
owned ASE ADSs or ASE Common Shares, the dissenting U.S. Holder will generally recognize capital gain or loss in an amount equal
to the difference between the amount of cash received by such U.S. Holder following the exercise of the dissenter’s rights
and its tax basis in the ASE Common Shares disposed of. Such capital gain or loss will be long-term capital gain or loss if, as
of the date of the disposition, the dissenting U.S. Holder’s holding period for the ASE Common Shares exceeds one year.
Any gain or loss generally will be U.S.-source gain or loss for foreign tax credit purposes.
Tax Consequences of Owning HoldCo ADSs
and HoldCo Common Shares
Except as discussed below under “-Passive
Foreign Investment Company Rules,” this discussion assumes that HoldCo will not be a PFIC for any taxable year.
Taxation of Distributions
Distributions other than certain
pro
rata
distributions of HoldCo Common Shares to all shareholders (including holders of HoldCo ADSs), will be treated as dividends
to the extent paid out of HoldCo’s current or accumulated earnings and profits, as determined under U.S. federal income tax
principles. Because HoldCo doesn’t expect to maintain calculations of earnings and profits under U.S. federal income tax
principles, it is expected that distributions generally will be reported to U.S. Holders as dividends.
Dividends will be treated as foreign-source
income for foreign tax credit purposes and will not be eligible for the dividends-received deduction generally available to U.S.
corporations under the Code. Subject to applicable limitations and the discussion above regarding concerns expressed by the U.S.
Treasury, dividends paid to certain non-corporate U.S. Holders of ADSs may be eligible for taxation as “qualified dividend
income” and therefore may be taxable at the rates applicable to long-term capital gains. Non-corporate U.S. Holders should
consult their tax advisers regarding the availability of these favorable rates in their particular circumstances.
Dividends generally will be included in
a U.S. Holder’s income on the date of the U.S. Holder’s or, in the case of ADSs, the depositary’s receipt of
the dividend. The amount of any dividend paid in new Taiwan dollars will be the U.S. dollar amount of the dividend calculated by
reference to the spot rate in effect on the date of receipt, regardless of whether the payment is in fact converted into U.S. dollars
on such date. If the dividend is converted into U.S. dollars on the date of receipt, a U.S. Holder should not be required to recognize
foreign currency gain or loss in respect of the dividend. A U.S. Holder may have foreign currency gain or loss if the dividend
is converted into U.S. dollars after the date of receipt, and any such gain or loss will generally be U.S.-source ordinary income
or loss.
The amount of dividend income will include
any amounts withheld by HoldCo in respect of ROC taxes reduced by any credit against withholding on account of the 10% retained
earnings tax imposed on HoldCo. Subject to applicable limitations, which vary depending upon the U.S. Holder’s circumstances,
and subject to the discussion above regarding concerns expressed by the U.S. Treasury, ROC taxes withheld from dividends, reduced
by any credit against the withholding tax which is paid by HoldCo on account of the 10% retained earnings tax, generally will be
creditable against the U.S. Holder’s U.S. federal income tax liability. The rules governing foreign tax credits are complex,
and U.S. Holders should consult their tax advisers regarding the creditability of foreign taxes in their particular circumstances.
In lieu of claiming a credit, a U.S. Holder may elect to deduct such ROC taxes in computing its taxable income, subject to applicable
limitations. An election to deduct foreign taxes instead of claiming foreign tax credits must apply to all foreign taxes paid or
accrued in the taxable year.
Sale or Other Taxable Disposition of HoldCo
ADSs or HoldCo Common Shares
A U.S. Holder will generally recognize
taxable gain or loss on a sale or other disposition of HoldCo ADSs or HoldCo Common Shares equal to the difference between the
amount realized on the sale or other taxable disposition and the U.S. Holder’s tax basis in the HoldCo ADSs or HoldCo Common
Shares. This gain or loss generally will be capital gain or loss, and will be long-term capital gain or loss if at the time of
sale or disposition the U.S. Holder has owned the HoldCo ADSs or HoldCo Common Shares for more than one year. Any gain or loss
generally will be U.S.-source gain or loss for foreign tax credit purposes. The deductibility of capital losses is subject to limitations.
Passive Foreign Investment Company Rules
In general, a non-U.S. corporation
is a PFIC for any taxable year in which (i) 75% or more of its gross income consists of passive income or (ii) 50% or more of
the average quarterly value of its assets consists of assets that produce, or are held for the production of, passive income.
For purposes of the above calculations, a non-U.S. corporation that owns directly or indirectly at least 25% by value of the shares
of another corporation is treated as if it held its proportionate share of the assets of the other corporation and received directly
its proportionate share of the income of the other corporation. Passive income generally includes dividends, interest, royalties
and rents. HoldCo does not expect to be a PFIC for its current taxable year or in the foreseeable future. However, because the
determination of whether a company is a PFIC is an annual test that is based on the composition of a company’s income and
assets and the value of its assets from time to time, there can be no assurance that HoldCo will not be a PFIC for any taxable
year.
If HoldCo were a PFIC for any taxable year
during which a U.S. Holder held HoldCo ADSs or HoldCo Common Shares, gain recognized by a U.S. Holder on a sale or other disposition
(including certain pledges) of the HoldCo ADSs or HoldCo Common Shares would be allocated ratably over the U.S. Holder’s
holding period for the HoldCo ADSs or HoldCo Common Shares. The amounts allocated to the taxable year of the sale or other disposition
and to any year before HoldCo became a PFIC would be taxed as ordinary income. The amount allocated to each other taxable year
would be subject to tax at the highest rate in effect for individuals or corporations, as appropriate, for that taxable year, and
an interest charge would be imposed on the tax on such amounts. In addition, any distribution received by a U.S. Holder on its
HoldCo ADSs or HoldCo Common Shares, to the extent that it exceeds 125% of the average of the annual distributions received by
the U.S. Holder during the preceding three years or the U.S. Holder’s holding period, whichever is shorter, would be subject
to taxation in the same manner. Furthermore, if HoldCo were a PFIC for the taxable year in which it paid a dividend or the prior
taxable year, the preferential dividend rates discussed above with respect to dividends paid to certain non-corporate U.S. Holders
would not apply. Certain elections may be available that would result in alternative treatments (such as mark-to-market treatment)
of the HoldCo ADSs or HoldCo Common Shares.
U.S. Holders should consult their tax advisers
regarding the U.S. federal income tax consequences of owning and disposing of HoldCo ADSs or HoldCo Common Shares if HoldCo were
a PFIC for any taxable year.
Information Reporting and Backup Withholding
Payments of dividends and sales proceeds
that are made within the United States or through certain U.S.-related financial intermediaries generally will be subject to information
reporting and backup withholding unless (i) the U.S. Holder is a corporation or other exempt recipient and, if required, demonstrates
its status or (ii) in the case of backup withholding, the U.S. Holder provides a correct taxpayer identification number and certifies
that it is not subject to backup withholding. Any amounts withheld under the backup withholding rules will be allowed as a refund
or credit against the U.S. Holder’s U.S. federal income tax liability, provided that the required information is timely furnished
to the U.S. Internal Revenue Service.
Foreign Financial Asset Reporting
Certain U.S. Holders who are individuals
(or entities formed or availed of to hold certain specified foreign financial assets) may be required to report information relating
to their ownership of the HoldCo Common Shares or HoldCo ADSs, unless such Common Shares or ADSs are held in accounts at financial
institutions (in which case the accounts may be reportable if maintained by non-U.S. financial institutions). U.S. Holders should
consult their tax advisers regarding their reporting obligations with respect to the HoldCo Common Shares or HoldCo ADSs.
Accounting Treatment of the Share Exchange
Under IFRS, the Cash Consideration paid
by HoldCo pursuant to the Share Exchange will be accounted for by applying the acquisition method of accounting with HoldCo being
considered the acquirer of SPIL for accounting purposes. Upon the completion of the Share Exchange, HoldCo would obtain control
of SPIL and any equity interest previously held in SPIL accounted for as equity method investments is treated as if it were disposed
of and reacquired at fair value on the acquisition date. Accordingly, it is remeasured to its acquisition-date fair value, and
any resulting gain or loss compared to its carrying amount is recognized in profit or loss. HoldCo will measure the identifiable
assets acquired and the liabilities assumed at their acquisition date fair values, and recognize goodwill as
of
the acquisition date measured as the excess of the Cash Consideration and the fair value of the ASE's previously held equity interest
in SPIL over the net of the acquisition date fair value of the identifiable assets acquired and the liabilities assumed. Goodwill
is not amortized but is tested for impairment at least annually.
Under IFRS, the exchange of ASE Common
Shares for HoldCo Common Shares and the exchange of ASE ADSs for HoldCo ADSs based on the Exchange Ratio will be accounted for
as a legal reorganization of entities under common control. ASE and HoldCo are ultimately controlled by the same shareholders both
before and after the Share Exchange and that control is not transitory; therefore, the Share Exchange under common control will
not be accounted for by applying the acquisition method as above. Accordingly, ASE will recognize no gain or loss in connection
with the exchange of ASE Common Shares for HoldCo shares upon the Share Exchange under common control, and all assets and liabilities
of ASE will be recorded on the books of HoldCo at the predecessor carrying amounts.
Regulatory Approvals Required to Complete the Share Exchange
ASE and SPIL have each agreed to use their
reasonable efforts to obtain all necessary governmental approvals required to complete the Share Exchange. The following is a summary
of the regulatory approvals required for the completion of the Share Exchange. As of the date of this proxy statement/prospectus,
the TFTC has issued a no objection letter in respect of the Share Exchange. However, there can be no assurance as to if and when
regulatory approvals will be obtained in the PRC, or if and when the FTC will complete its investigation without seeking an injunction
prohibiting the Share Exchange or as to the conditions or limitations that such regulatory authorities may seek to impose.
Taiwan Fair Trade Commission Approval
Both ASE and SPIL operate in the ROC.
Under the ROC Fair Trade Act, transactions involving parties with sales above certain revenue levels cannot be completed until
they are reviewed and approved by the TFTC. ASE and SPIL submitted the required materials to the TFTC on July 29, 2016. The TFTC
formally accepted the parties’ notification materials on September 19, 2016, and issued a no-objection letter in respect
of the Share Exchange on November 16, 2016.
United States Antitrust Review
On October 26, 2016, the FTC issued
a subpoena and civil investigative demand to ASE and SPIL with respect to the transaction contemplated under the Joint Share Exchange
Agreement. On January 17, 2017, ASE and SPIL each certified that it complied with the FTC’s requests for information.
On May 15, 2017, ASE received a letter from the FTC confirming that the non-public investigation of the proposed combination had
been closed.
The Ministry
of Commerce of the People’s Republic of China
Under the Chinese
Anti-Monopoly Law of 2008 and relevant regulations (“AML”), if the concentration arising from a transaction that reaches
the threshold level as set by the State Council, it cannot be completed until it is approved by MOFCOM. ASE and SPIL have sufficient
revenues in both China and worldwide to exceed the statutory thresholds and completion of the Share Exchange is therefore conditioned
upon MOFCOM’s approval. ASE and SPIL submitted the required materials to MOFCOM on August 25, 2016. MOFCOM formally accepted
the parties’ notification materials on December 14, 2016, starting Phase I of the review process. MOFCOM issued notice extending
its review to Phase II review on January 12, 2017. MOFCOM issued a notice extending its review to Phase III review on April 12,
2017. On June 5, 2017, ASE withdrew the original submission filed with MOFCOM and re-filed the same application with MOFCOM on
June 5, 2017. Phase II of MOFCOM’s review began on July 5, 2017. Phase III of MOFCOM’s review began on September 30,
2017. On November 24, 2017, MOFCOM approved the proposed combination on the following four conditions, among others:
|
·
|
HoldCo
should maintain the legal personality of ASE and SPIL as independent competitors for
a period of 24 months (the “Restriction Period”). During the Restriction
Period, ASE and SPIL will each operate independently and compete in the market according
to the pre-merger business management model and market practices, including, but not
limited to: independent management, independent financial affairs, independent corporate
personnel, independent pricing, independent sales, independent production capacities,
and independent procurement.
|
|
·
|
During
the Restriction Period, HoldCo will only exercise limited shareholder rights. Such limitation
includes: other than the right to obtain dividend related and financial information from
ASE and SPIL, HoldCo should temporarily cease to exercise its other shareholder’s
rights; notwithstanding the above, HoldCo’s Resource Integration & Steering
Committee may coordinate the plan, arrangement and the management of research-related
projects and consolidate research capacity for ASE and SPIL; HoldCo’s Resource
Integration & Steering Committee may also coordinate business matters that do
not involve semiconductor packaging and testing businesses. HoldCo, on the one hand,
and ASE or SPIL, on the other hand, may loan company funds and provide financing to each
other in accordance with such party’s needs or request.
|
|
·
|
During
the Restriction Period, ASE and SPIL each covenants to provide services to customers
on a non-discriminatory basis, and set service price and related transactional terms
according to AML, reasonable commercial consideration and normal business operation.
|
|
·
|
During
the Restriction Period, ASE and SPIL each covenants to not limit the customers’
choice of alternative suppliers of semiconductor packaging and testing businesses,
and will cooperate with customers on requests related to switching such suppliers, under
the circumstance that the customers obey the laws and regulations, and do not involve
tort and breaking contracts.
|
All the
conditions above are subject to further revisions in the official notice that may be published by MOFCOM from time to time.
Other Jurisdictions
ASE and SPIL derive revenues in other jurisdictions
where merger or acquisition control filings or clearances are or may be required. ASE and SPIL have sufficient revenues in South
Korea and Germany to meet the statutory thresholds, and completion of the Share Exchange is therefore conditioned upon approval
of the Korea Fair Trade Commission (“KFTC”) and the German Federal Cartel Office (“FCO”). The KFTC cleared
the Initial ASE Tender Offers on November 18, 2015. Under the laws of South Korea, the clearance on the Initial ASE Tender Offers
extends to the Share Exchange and no additional filing is required. The FCO cleared the Initial ASE Tender Offers on February 1,
2016 and subsequently confirmed that its February 1, 2016 clearance extends to the Share Exchange on July 26, 2016.
Share Exchange Listing
It is expected that HoldCo Common Shares
will be listed on the TWSE and HoldCo ADSs will be listed on the NYSE at the Effective Time. As a result of the Share Exchange,
ASE Common Shares currently listed on the TWSE and ASE ADSs currently listed on the NYSE will cease to be listed on the TWSE and
the NYSE, respectively; SPIL Common Shares currently listed on the TWSE and SPIL ADSs currently listed on NASDAQ will cease to
be listed on the TWSE and NASDAQ, respectively.
The following is a tentative timetable
of the various trading-related events in connection with the completion of the Share Exchange:
Final trading day for ASE Common Shares
and SPIL Common Shares on the TWSE
|
[DATE], 2018 (Taiwan time)
|
Final trading day for ASE ADSs on the NYSE and SPIL
ADSs on NASDAQ
|
[DATE], 2018 (New York time)
|
Effective date of the Share Exchange
|
[DATE], 2018 (Taiwan time)
|
First trading day for HoldCo Common Shares on the
TWSE
|
[DATE], 2018 (Taiwan time)
|
First trading day for HoldCo ADSs on the NYSE
|
[DATE], 2018 (New York time)
|
In advance of completion of the Share Exchange,
ASE expects to publicly announce the definitive timetable for these trading-related events.
Rights of Dissenting Shareholders
Under the ROC Company Law and ROC Mergers
and Acquisitions Act, when ASE’s or SPIL’s board proposes the Share Exchange to ASE EGM or the extraordinary shareholders’
meeting of SPIL (“SPIL EGM”) for approval, ASE’s or SPIL’s dissenting shareholder (“Dissenting Shareholder”)
will be entitled to an appraisal right, and to obtain payment of the fair value of all the Dissenting Shareholder's shares (“Dissenting
Shares”). Only ASE shareholders who hold ASE Common Shares of record on the ASE EGM Record Date are entitled to vote at
the ASE EGM, and to exercise the appraisal rights conferred on dissenting shareholders by the laws of the ROC. ASE ADS holders
who wish to be entitled to appraisal rights must cancel their ASE ADSs by close of business (New York time) on [DATE], 2018 and
become holders of ASE Common Shares by [DATE], 2018 (Taiwan time). The procedure for Dissenting Shareholders to exercise an appraisal
right is set forth below.
The Dissenting Shareholder should either
(a) deliver a written notice to ASE (or SPIL) stating his/her dissent from the proposal of Share Exchange on or before the ASE
EGM (or SPIL EGM), or (b) at the ASE EGM (or SPIL EGM) orally express his/her dissent from the proposal of Share Exchange in person
and ensure that such statement is duly recorded in the meeting minutes.
|
·
|
Dissenting Shareholder must waive its voting right against the Share Exchange in ASE EGM (or SPIL EGM).
|
|
·
|
Once ASE EGM and SPIL EGM pass the Share Exchange, the Dissenting Shareholder needs to deliver its Dissenting Shares to a licensed
share registrar appointed by ASE (or SPIL, as applicable) through the book-entry system. Once the Dissenting Shares are duly delivered,
the share registrar will issue a certificate evidencing the receipt of Dissenting Shares to the Dissenting Shareholder.
|
|
·
|
Dissenting Shareholder needs to deliver to ASE (or SPIL), within 20 calendar days following the ASE EGM (or SPIL EGM), (a)
a written notice stating the proposed price for sale of the Dissenting Shares to ASE (or SPIL) (the “Dissenting Shareholder’s
Price”) and (b) the certificate of delivery of Dissenting Shares issued by the appointed share registrar.
|
Once the Dissenting
Shareholder exercises the appraisal right in accordance with the procedure described above, ASE or SPIL should determine whether
to (a) accept the Dissenting Shareholder’s Price or (b) negotiate the price with the Dissenting Shareholder within 60 calendar
days following the ASE EGM or SPIL EGM (“Negotiation Period”).
If ASE (or SPIL)
and Dissenting Shareholder cannot reach an agreement on the purchase price within the Negotiation Period, ASE (or SPIL) should
file a petition with a court of competent jurisdiction in Taiwan for a determination of the fair value of the Dissenting Shares
within 30 calendar days after the end of the Negotiation Period (the “Petition Period”). If ASE (or SPIL) fails to
pay the Company’s Price (as defined below) within the Negotiation Period or to file the petition with the court within the
Petition Period, ASE/SPIL will be deemed to accept the Dissenting Shareholder’s Price and obliged to settle the purchase
of Dissenting Shares in accordance with the Dissenting Shareholder’s Price.
According to the majority
of the precedents, the court usually considered that the “fair value” should be the closing price of the shares registered
on the open market on the date of the shareholders’ meeting which approves the transaction. However, as the court has the
full discretion to determine the fair value based on a variety of arguments, the court might hold a view different from the majority
of precedents.
If ASE (or SPIL) and Dissenting Shareholder
cannot reach an agreement on the purchase price within the 90 calendar days following the ASE EGM (or SPIL EGM), ASE or (SPIL)
should determine a fair price to purchase the Dissenting Shares (the “Company’s Price”) and pay the Company Price
to the Dissenting Shareholder by end of such 90-calendar-day period.
ASE or SPIL should, within 30 calendar
days after the court decision is concluded, pay to the Dissenting Shareholders (a) the difference between the Company’s Price
and the fair value as determined by the court, and (b) the interest, calculated by a 5% annual rate, against such difference amount
for purchase of the Dissenting Shares.
The relevant portions of Article 12 of
the ROC Mergers and Acquisitions Act are as follows, which is included in Annex C to this proxy statement/prospectus:
ROC MERGERS AND ACQUISITIONS ACT –
ARTICLE 12
If the following event occurs when a company is undergoing
a merger, consolidation, acquisition or division, a shareholder may request the company to repurchase his/her/its shares at the
then-fair price of such shares:
|
4.
|
In the event that the company is undergoing an acquisition as described in Article 27 of this Act, the shareholder delivers
a written objection or an oral objection that has been put into the record and waives his/her/its voting rights before or during
the shareholders’ meeting;
|
Any shareholder who has made the request as provided in the
preceding paragraph shall submit a written request that specifies the requested repurchase price and deposit the certificates of
his/her/its shares within 20 days immediately following the date at which the shareholder resolutions are passed.
The company shall appoint an institution that is permitted by
law to provide corporate action services to handle the shares deposited by the dissenting shareholder. The shareholder shall deposit
his/her/its shares to such institution and the institution shall issue a certificate that specifies the type and amount of deposited
shares to the shareholder; any deposit by book-entry transfer shall be governed by the procedures set forth in the rules and regulations
in relation to the centralized securities depositary enterprises.
The request of a shareholder as provided in Paragraph 1 shall
lose its effect when the company abandons its corporate action as provided in the same paragraph.
If the company and the shareholder reach an agreement with respect
to the repurchase price, the company shall pay such repurchase price to the shareholder within 90 days immediately following the
date at which the shareholders’ resolutions are passed. If no agreement is reached, within 90 days immediately after the
date at which the shareholders’ resolutions are passed, the company shall pay for the shares of the shareholder with whom
it has not reached an agreement at a price determined by the company as the fair price for such shares; if the company fails to
make such payment, the company shall be deemed as having agreed to the repurchase price requested by the shareholder pursuant to
Paragraph 2.
If the company fails to reach an agreement with any shareholder
with respect to the repurchase price within 60 days immediately following the date at which the shareholders’ resolutions
are passed, the company shall, within 30 days after the expiry of the 60-day period, file a petition with a court for a ruling
to determine the fair price of the shares against all the shareholders with whom it has not reached an agreement as the opposing
parties. If the company fails to list any shareholder with whom it has not reached an agreement as an opposing party, or the petition
is withdrawn by the company or dismissed by the court, the company shall be deemed as having agreed to the repurchase price requested
by the shareholder pursuant to Paragraph 2. However, if the opposing party has already presented his/her/its position in the court
or the court’s ruling has already been delivered to the opposing party, the company shall not withdraw the petition unless
agreed to by the opposing party.
When the company files a petition with the court for a ruling
to determine the repurchase price, the company shall attach to the petition the audited and attested financial statements of the
company and the fair price assessment report by the certified public accountants, and written copies and photocopies thereof according
to the number of opposing parties for the court to distribute to each opposing party.
Before making a ruling with respect to the repurchase price,
the court shall allow the company and the opposing parties to have the chance to present their positions. If there are two or more
opposing parties, the provisions set out in Articles 41 to 44, as well as Paragraph 2 of Article 401 of the ROC Civil Procedure
Code shall apply
mutatis mutandis
.
If any party appeals against the ruling made pursuant to the
preceding paragraph, the court shall allow the parties at dispute to have the chance to present their positions before making a
decision on the appeal.
When the ruling with respect to the repurchase price becomes
final and binding, the company shall, within 30 days immediately after the ruling becomes final and binding, pay such final repurchase
price to the dissenting shareholders, deducting any previous payment and interest accrued since the next day of the expiry of the
90-day period immediately following the date at which the shareholders’ resolutions are passed.
The provisions set forth in Article 171 and Paragraphs 1, 2
and 4 of Article 182 of the ROC Non-Contentious Matters Act shall apply
mutatis mutandis
.
The company shall bear the expenses of the petition and the
appraiser’s compensation.
Holders of ASE ADSs and SPIL ADSs will
not have any appraisal rights in respect of the Share Exchange under the terms of the ASE Deposit Agreement and the SPIL Deposit
Agreement, as applicable. The ASE Depositary and the SPIL Depositary are not obligated to, and will not, exercise dissenters’
rights on behalf of holders of ASE ADSs or SPIL ADSs, as applicable, even if instructed to do so by holders of ASE ADSs or SPIL
ADSs. ASE ADS holders who wish to be entitled to appraisal rights may cancel their ADSs and become holders of ASE Common Shares
by [DATE], 2018. SPIL ADS holders who wish to be entitled to appraisal rights may cancel their ADSs and become holders of SPIL
Common Shares by [DATE], 2018.
Litigation Related to the Share Exchange
ASE is not aware of any lawsuit that challenges
the Share Exchange or any other transaction contemplated under the Joint Share Exchange Agreement.
Expenses Relating to the Share Exchange
In connection with the Share Exchange,
ASE expects to incur the costs, such as independent expert fees of US$ 4,000, legal fees of US$11.0 million and auditor fees of
US$3.9 million, in the aggregate amount of approximately US$14.9 million. In connection with the Share Exchange, SPIL expects
to incur the following costs and expenses as of the date of this proxy statement/prospectus.
Description
|
|
Amount
|
Financing fees and expenses and other professional fees
|
|
US$
|
11,496
|
Legal fees and expenses
|
|
US$
|
8,000
|
Miscellaneous (including filing fees, printing fees, proxy solicitation fees and mailing
costs)
|
|
US$
|
1,128
|
Total
|
|
US$
|
20,624
|
All costs and expenses incurred in connection
with the Share Exchange, the Joint Share Exchange Agreement and the completion of the transactions contemplated by the Joint Share
Exchange Agreement will be paid by the party incurring such costs and expenses, except as otherwise explicitly provided for in
the Joint Share Exchange Agreement, whether or not the Share Exchange or any other transactions contemplated by the Joint Share
Exchange Agreement are completed.
Comparison of Rights of Shareholders of ASE and HoldCo
ASE is, and HoldCo will be, a company limited
by shares organized under the laws of the ROC. ASE Common Shares are, and HoldCo Common Shares will be, listed on the TWSE. ASE
ADSs are, and HoldCo ADSs representing HoldCo Common Shares will be, listed on the NYSE. In addition, the description of the attributes
of common shares in the share capital provisions of the Articles of Incorporation of ASE and HoldCo are substantially similar.
As a result, there are no material differences between the rights of holders of ASE Common Shares and of HoldCo Common Shares from
a legal perspective.
See the sections entitled “Description
of HoldCo American Depositary Shares” and “Description of HoldCo Common Shares” for more information.
Cautionary
Statements Regarding Forward-Looking Statements
This proxy statement/prospectus and
the documents incorporated by reference herein contain forward-looking statements within the meaning of the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995 that are not limited to historical facts but reflect ASE’s and SPIL’s
current beliefs, expectations or intentions regarding future events. The words “anticipate,” “believe,”
“ensure,” “expect,” “if,” “intend,” “estimate,” “probable,”
“project,” “forecasts,” “predict,” “outlook,” “aim,” “will,”
“could,” “should,” “would,” “potential,” “may,” “might,”
“anticipate,” “likely,” “plan,” “positioned,” “strategy,” and similar
expressions, and the negative thereof, are intended to identify such forward-looking statements. These forward-looking statements,
which are subject to numerous factors, risks and uncertainties about ASE and SPIL, may include projections of their respective
future business, strategies, financial condition, results of operations and market data. These statements are only predictions
based on current expectations and projections about future events. There are important factors, risks and uncertainties that could
cause actual outcomes and results to be materially different from those projected, including those set forth in the section entitled
“Risk Factors,” the risk factors set forth in ASE 2016 20-F and the SPIL 2016 20-F and other documents on file with
the SEC and the factors given below:
|
·
|
the failure to obtain approval from ASE shareholders or the approval from SPIL shareholders in connection with the Share Exchange;
|
|
·
|
the failure to complete or delay in completing the Share Exchange for other reasons;
|
|
·
|
the timing to complete the Share Exchange;
|
|
·
|
the risk that a condition to the completion of the Share Exchange may not be satisfied;
|
|
·
|
the risk that a regulatory approval that may be required for the Share Exchange is delayed, is not obtained, or is obtained
subject to conditions that are not anticipated;
|
|
·
|
ASE’s and SPIL’s ability to achieve the cost and other synergies and value creation contemplated by the Share Exchange;
and
|
|
·
|
the diversion of management time on Share Exchange-related issues.
|
All subsequent written and oral forward-looking
statements concerning ASE, SPIL, the transactions contemplated by the Joint Share Exchange Agreement or other matters attributable
to ASE or SPIL or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements above.
ASE’s and SPIL’s forward-looking statements are based on assumptions that may not prove to be accurate. Neither ASE
nor SPIL can guarantee future results, activity levels, performance or achievements. Moreover, neither ASE nor SPIL assumes responsibility
for the accuracy and completeness of any of these forward-looking statements. ASE and SPIL assume no obligation to update or revise
any forward-looking statements as a result of new information, future events or otherwise. Readers are cautioned not to place undue
reliance on these forward-looking statements that speak only as of the date of this proxy statement/prospectus.
Risk Factors
In addition to the other information
contained or incorporated by reference into this prospectus, ASE shareholders should carefully consider the risks described below
and in the ASE 2016 20-F and the SPIL 2016 20-F, which is incorporated by reference into this proxy statement/prospectus, before
making a decision on the Share Exchange.
Risks Relating to the Share Exchange
The Share Exchange is subject to conditions,
including certain conditions that may not be satisfied, or completed on a timely basis, if at all. Failure to complete the Share
Exchange could have material and adverse effects on ASE.
The completion of the Share Exchange
is subject to a number of conditions, including, among other things, the approval by ASE shareholders of the proposal on the Joint
Share Exchange Agreement and the Share Exchange and the approval by SPIL shareholders of the proposal on the Joint Share Exchange
Agreement and the Share Exchange and obtaining antitrust and other regulatory approvals or decisions not to challenge the Share
Exchange which may make the completion and timing of the completion of the Share Exchange uncertain.
See the section entitled “The Joint Share Exchange Agreement — Conditions to Consummation of the Share Exchange”
for a more detailed discussion. Also, the Joint Share Exchange Agreement will be automatically terminated if the Share Exchange
has not been consummated by October 31, 2018.
If the Share Exchange is not completed
on a timely basis, or at all, ASE’s respective ongoing businesses may be adversely affected and, without realizing any of
the benefits of having completed the Share Exchange, ASE will be subject to a number of risks, including the following:
|
·
|
ASE is required to pay their respective costs relating to the Share Exchange, such as legal, accounting, financial advisory
and printing fees, even if the Share Exchange is not completed;
|
|
·
|
time and resources committed by ASE’s management to matters relating to the Share Exchange could otherwise have been
devoted to pursuing other beneficial opportunities;
|
|
·
|
the market prices of ASE Common Shares could decline to the extent that the current market prices of ASE Common Shares reflect
a market assumption that the Share Exchange will be completed;
|
|
·
|
ASE may have to dispose of its 33.29% interest in SPIL at a loss if the Share Exchange is not consummated, which may significantly
affect ASE’s financial position; and
|
|
·
|
ASE could be subject to litigation related to any failure to complete the Share Exchange or related to any enforcement proceedings
commenced against ASE to perform their respective obligations under the Joint Share Exchange Agreement.
|
ASE is subject to business uncertainties
and contractual restrictions while the proposed Share Exchange is pending, which could adversely affect each party’s business
and operations.
While the Share Exchange is pending completion,
it is possible that certain customers, suppliers and other persons with whom ASE has a business relationship may delay or defer
certain business decisions or might decide to seek to terminate, change or renegotiate their business relationships with ASE, as
the case may be, as a result of the pending the Share Exchange, which could negatively affect ASE’s revenues, earnings and
cash flows, as well as the market price of ASE Common Shares, regardless of whether the Share Exchange is completed.
Under the terms of the Joint Share Exchange
Agreement, ASE is subject to certain restrictions on the conduct of its business prior to completing the Share Exchange, which
may adversely affect its ability to execute certain of its business strategies, including the ability in certain cases to acquire
assets.
The Share Exchange is subject to the
receipt of approvals, consents or clearances from domestic and foreign regulatory authorities that may impose conditions that could
have an adverse effect on ASE or HoldCo or, if not obtained, could prevent the completion of the Share Exchange.
Before the Share Exchange can be completed,
any approvals, consents or clearances, including antitrust approval and clearances, required in connection with the Share Exchange
must have been obtained. In deciding whether to grant the required regulatory approval, consent or clearance, the relevant governmental
entities will consider the impact of the Share Exchange on competition within their relevant jurisdiction. The terms and conditions
of the approvals, consents and clearances that are granted may impose requirements, limitations or costs or place restrictions
on the conduct of HoldCo’s business.
Under the Joint Share Exchange Agreement,
ASE and SPIL have agreed to use their reasonable efforts to obtain such approvals, consents and clearances and therefore may be
required to comply with conditions or limitations imposed by governmental authorities. However, no assurance can be given that
the applicable regulatory agencies will approve the transaction or that any such transaction can be completed prior to or upon
the completion of the Share Exchange, or at all.
There can be no assurance that regulators
will not impose unanticipated conditions, terms, obligations or restrictions and that such conditions, terms, obligations or restrictions
will not have the effect of delaying the completion of the Share Exchange or imposing additional material costs on or materially
limiting the revenues of HoldCo following the completion of the Share Exchange.
There can be no assurance that ASE will
be able to secure the funds necessary to pay the cash portion of the Cash Consideration on acceptable terms, in a timely manner,
or at all.
ASE intends to fund the Cash Consideration
with a combination of cash on hand and debt financing. To this end, Citibank Taiwan Limited and DBS Bank Ltd., Taipei Branch have
each issued a highly confident letter stating that it is highly confident that it could arrange debt facilities for the Share
Exchange up to US$3.8 billion and NT$53 billion (US$1.74 billion), respectively. However, neither ASE nor any of its subsidiaries
has entered into definitive agreements for the debt financing (or any equity issuance or other financing arrangements in lieu
thereof). There can be no assurance that ASE will be able to secure the debt financing pursuant to the highly confident letters.
In the event that the debt financing contemplated
by the highly confident letters is not available, other financing may not be available on acceptable terms, in a timely manner,
or at all. If ASE is unable to secure financing for the Share Exchange, the Share Exchange may not be completed. In the event of
a termination of the Joint Share Exchange Agreement due to ASE’s failure to obtain the necessary financing to complete the
Shares Exchange, ASE and HoldCo may be jointly and severally liable to pay to SPIL, in addition to the actual damages incurred,
liquidated damages in the amount of NT$8.5 billion (US$0.3 billion).
The unaudited pro forma condensed combined
financial data in this proxy statement/prospectus is presented for illustrative purposes only and may differ materially from the
operating results and financial condition of HoldCo following completion of the pro forma events.
The unaudited pro forma condensed combined
financial data in this proxy statement/prospectus is presented for illustrative purposes only and is not necessarily indicative
of what the combined company’s actual financial position or results of operations would have been had the pro forma events
been completed on the dates indicated. In addition, the unaudited pro forma condensed combined financial information does not purport
to project the future financial position or operating results of HoldCo. The preparation of the pro forma condensed combined financial
information is based upon available information and certain assumptions and estimates that ASE and SPIL currently believe are reasonable.
The unaudited pro forma condensed combined financial data reflects adjustments, which are based upon preliminary estimates, to
allocate the purchase price to SPIL’s net assets. The purchase price allocation reflected in this proxy statement/prospectus
is preliminary, and the final allocation of the purchase price will be based upon the actual purchase price and the fair value
of the assets and liabilities of SPIL as of the Effective Time. In addition, subsequent to the completion of the Share Exchange,
there may be further refinements of the purchase price allocation as additional information becomes available. Accordingly, the
final purchase accounting adjustments may differ materially from the pro forma adjustments reflected in this proxy statement/prospectus.
See the section entitled “Selected Unaudited Pro Forma Condensed Combined Financial Data.”
HoldCo may fail to successfully integrate
the resources from ASE and SPIL and realize the anticipated benefits from the Share Exchange.
The success of the Share Exchange and the
holding company structure that will be created pursuant to such Share Exchange will depend, in large part, on the ability of HoldCo
to realize the anticipated synergies, operational efficiencies and growth opportunities from the Share Exchange. The realization
of the anticipated benefits of the holding company structure may be blocked, delayed or reduced as a result of many factors, some
of which may be outside our control. These factors include:
|
·
|
the complexities associated with integrating resources with ASE and SPIL continuing to operate independently and failure to
leverage the holding company structure to realize operational efficiencies;
|
|
·
|
unforeseen contingent risks, including lack of required capital resources or increased tax liabilities, relating to the holding
company structure that may become apparent in the future;
|
|
·
|
the considerations discussed in the next risk factor;
|
|
·
|
unexpected business disruptions; and
|
|
·
|
failure to attract, develop and retain personnel with necessary expertise.
|
In addition, there may be valuation discounts
as a result of the adoption of a holding company structure which may have an adverse effect on the trading value of HoldCo Common
Shares or ADSs. Any of the foregoing could adversely affect ASE’s and SPIL’s ability to maintain relationships with
customers, suppliers, employees and other constituencies or ASE’s and SPIL’s ability to achieve the anticipated benefits
of the Share Exchange or could reduce each of ASE’s and SPIL’s earnings or otherwise adversely affect the business
and financial results of HoldCo.
The independent operations of SPIL after
the completion of the Share Exchange may make it difficult to integrate the operations of both companies.
Although SPIL will become a wholly owned
subsidiary of HoldCo after the completion of the Share Exchange, under the terms of the Joint Share Exchange Agreement, ASE and
SPIL have agreed that SPIL will maintain a high degree of independence with respect to its operations and corporate governance.
ASE and SPIL have entered into a number of covenants to ensure SPIL’s independence of operation.
For a more detailed description of these
and other covenants, please refer to “The Joint Share Exchange Agreement – Post-Closing Operation and Corporate Governance
– Independence” and “Annex A: Joint Share Exchange Agreement dated June 30, 2016 (English translation).”
Notwithstanding the agreement to maintain
SPIL’s independent operations, under the Joint Share Exchange Agreement, HoldCo is required to assist SPIL’s operations.
For example, HoldCo will, to the extent that it is capable, provide guaranties, funding or other support sufficient to enable SPIL
to obtain financing from third parties (including, but not limited to, guarantee documentation acceptable to financing parties),
in order to meet SPIL’s funding needs, including, but not limited to, capital expenditure and working capital.
There are uncertainties as to the impact
of the independence of SPIL in terms of its operation and corporate governance would have on integration plans and future growth
opportunities of ASE and SPIL under Holdco.
The future results of HoldCo may suffer
if HoldCo does not effectively manage its expanded operations following the completion of the Share Exchange.
Following the completion of the Share Exchange,
the size of the business of HoldCo will increase significantly beyond the current size of either ASE’s or SPIL’s business.
HoldCo’s future success depends, in part, upon its ability to manage this expanded business, which will pose substantial
challenges for management, including challenges related to the management and monitoring of new operations and associated increased
costs and complexity. There can be no assurances that HoldCo will be successful or that it will realize the expected operating
efficiencies, cost savings and other benefits currently anticipated from the completion of the Share Exchange.
Since HoldCo will be a holding company,
it will depend on limited forms of funding to fund its operations.
As a holding company, HoldCo will have
no significant assets other than the shares of its subsidiaries. HoldCo’s primary sources of funding and liquidity will be
dividends from its subsidiaries, sales of the interests in its subsidiaries and direct borrowings and issuances of equity or debt
securities. HoldCo’s ability to meet the obligations to its direct creditors and employees and other liquidity needs and
regulatory requirements will depend on timely and adequate distributions from its subsidiaries and its ability to sell securities
or obtain credit from its lenders.
HoldCo’s ability to pay operating
and financing expenses and dividends will depend primarily on the receipt of sufficient funds from its principal operating subsidiaries.
Statutory provisions regulate HoldCo’s operating subsidiaries’ ability to pay dividends. If HoldCo’s operating
subsidiaries are unable to pay dividends to HoldCo in a timely manner and in amounts sufficient to pay for HoldCo’s operation
and financing expenses or to declare and pay dividends and to meet its other obligations, HoldCo may not be able to pay dividends
or it may need to seek other sources of funding.
Furthermore, HoldCo’s inability to
sell its securities or obtain funds from its lenders on favorable terms, or at all, could also result in HoldCo’s inability
to meet its liquidity needs and regulatory requirements and may disrupt its operations at the holding company level.
In connection with the Share Exchange, existing
ASE shareholders may not trade the ASE Common Shares or ADSs during certain periods.
In connection with the Share Exchange,
ASE Common Shares will be suspended from trading on the TWSE, and ASE ADSs will be suspended from trading on the NYSE starting
from the eighth (8th) ROC Trading Day before the Effective Time. As a result, holders of ASE Common Shares and ADSs will not be
able to trade those shares or ADSs, or HoldCo shares or ADSs they will be entitled to receive when the Share Exchange is completed,
during the applicable trading gap. Accordingly, these holders will be subject to the risk of not being able to liquidate their
shares during a falling market, whether for ROC equities generally or for ASE Common Shares and ASE ADSs in particular.
There has been no prior market for the HoldCo Common
Shares or ADSs.
ASE plans to apply for listing HoldCo Common
Shares and HoldCo ADSs and expect that HoldCo Common Shares will begin trading in Taiwan during TWSE trading hours, and HoldCo
ADSs will begin trading in the U.S. during NYSE trading hours, on the effective date of the Share Exchange. However, given that
HoldCo will be formed as a new entity, there will be no public market for HoldCo Common Shares or HoldCo ADSs prior to their issuance
in connection with the Share Exchange. An active public market in the HoldCo Common Shares or HoldCo ADSs may not develop or be
sustained after their issuance.
Risks Relating to Owning HoldCo ADSs
The market for HoldCo ADSs may not be liquid.
Active, liquid trading markets generally
result in lower price volatility and more efficient execution of buy and sell orders for investors, compared to less active and
less liquid markets. Liquidity of a securities market is often a function of the volume of the underlying shares that are publicly
held by unrelated parties.
Although holders of HoldCo ADS will be
entitled to withdraw HoldCo Common Shares underlying the ASE ADSs from the depositary at any time, ROC law requires that HoldCo
Common Shares be held in an account in the ROC or sold for the benefit of the holder on the TWSE. In connection with any withdrawal
of HoldCo Common Shares from the HoldCo ADS facility, the HoldCo ADSs evidencing these common shares will be cancelled. Unless
additional ADSs are issued, the effect of withdrawals will be to reduce the number of outstanding ADSs. If a significant number
of withdrawals are effected, the liquidity of HoldCo ADSs will be substantially reduced.
HoldCo will be a foreign private
issuer, and as such it is exempt from certain provisions applicable to United States domestic public companies.
Because HoldCo qualifies as a foreign private
issuer, it is exempt from certain provisions of the securities rules and regulations in the United States that are applicable to
U.S. domestic issuers, including:
|
·
|
rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q or current reports on Form
8-K;
|
|
·
|
sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered
under the Exchange Act;
|
|
·
|
sections of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and
liability for insiders who profit from trades made in a short period of time; and
|
|
·
|
selective disclosure rules by issuers of material nonpublic information under Regulation FD.
|
HoldCo will be required to file an annual
report on Form 20-F within four months of the end of each fiscal year. In addition, HoldCo intends to publish its results on a
quarterly basis as press releases, distributed pursuant to the rules and regulations of the NYSE. Press releases relating to financial
results and material events will also be furnished to the SEC on Form 6-K. However, the information HoldCo is required to file
with or furnish to the SEC will be less extensive and less timely as compared to that required to be filed with the SEC by United
States domestic issuers.
As a ROC company listed on the NYSE,
HoldCo will be subject to the NYSE corporate governance listing standards. However, HoldCo, as a foreign private issuer, will
also be permitted to follow certain home country corporate governance practices instead of those otherwise required under the
NYSE’s rules for domestic U.S. issuers, provided that HoldCo discloses which requirements it is not following and describe
the equivalent home country requirement in its annual report on Form 20-F. Holdco intends to rely on home country practice to
exempt out of the requirement for NYSE listed companies to have a majority of independent directors. The Joint Share Exchange
Agreement provides that, for the first term of HoldCo’ board of directors, HoldCo’s incorporators’ meeting will
elect nine to thirteen non-independent directors and three supervisors who will become independent directors. The articles of
incorporation of HoldCo further provides that starting from the second term of its board of directors term, HoldCo shall have
thirteen directors, of which three shall be three independent directors and ten non-independent directors.
To the extent that HoldCo chooses to
follow its home country corporate governance practice, its shareholders may be afforded less protection than they would otherwise
have under the NYSE corporate governance listing standards applicable to U.S. domestic issuers. As a result, you may not be afforded
the same protections or information, which would be made available to you, were you to invest in a United States domestic issuer.
The ongoing proceeding involving
Dr. Tien Wu may have an adverse impact on HoldCo’s business and cause HoldCo’s share price to decline.
Dr. Tien Wu, ASE’s director and
Chief Operating Officer and a nominee for HoldCo’s director, is currently undergoing criminal proceedings brought by the
Kaohsiung Prosecutor’s Office. The indictment alleges that Dr. Tien Wu violated Article 157-1 of the ROC Securities and
Exchange Law for insider trading activities involving SPIL Common Shares conducted during the period when the Initial ASE Tender
Offers, the Second ASE Tender Offers and negotiations of the Joint Share Exchange MOU took place. No judicial conclusion has been
reached yet for this proceeding. Further development of this proceeding may result in regulatory scrutiny from the Taiwan Stock
exchange or other regulators on a discretionary basis. If Dr. Tien Wu is sentenced or pleads guilty to the alleged violations,
investor confidence in HoldCo could be impaired and HoldCo’s capacity to retain or attract clients could be negatively affected.
Although neither ASE, SPIL nor any their directors or the nominees for HoldCo’s directors is expected to become party to
any current or future litigation related to Dr. Tien Wu, there is no assurance that there will not be similar or related litigation
in the future.
Although ROC Company law and other
relevant regulations do not require a company to discharge any director who receives a sentence by a court for violating Article
157-1 of the ROC Securities and Exchange Law, the Securities and Futures Investors Protection Center may file a civil lawsuit
against Dr. Tien Wu to request the court to remove him from HoldCo’s board seat based on Article 10-1 of the Securities
Investor and Futures Trader Protection Act. There is no assurance that this proceeding or the further scrutiny from regulators
will not generate
publicity
or media attention. Any negative publicity in connection to this legal proceeding may adversely affect HoldCo’s, ASE’s
or SPIL’s brand and reputation and result in a material adverse impact on their business operations and prospects. As ASE
and HoldCo depends on the continued service of its executive officers and is not insured against the loss of service of any of
their personnel, HoldCo’s or ASE’s business operations could suffer if it loses the service of any executive officers,
including Dr. Tien Wu, and cannot adequately replace them.
If a non-ROC holder of HoldCo ADSs withdraws and
holds HoldCo Common Shares, such holder of HoldCo ADSs will be required to appoint a tax guarantor, local agent and custodian in
the ROC and register with the TWSE in order to buy and sell securities on the TWSE.
When a non-ROC holder of HoldCo ADSs elects
to withdraw and hold HoldCo Common Shares represented by HoldCo ADSs, such holder of the ADSs will be required to appoint an agent
for filing tax returns and making tax payments in the ROC. Such agent will be required to meet the qualifications set by the ROC
Ministry of Finance and, upon appointment, becomes the guarantor of the withdrawing holder’s tax payment obligations. Evidence
of the appointment of a tax guarantor, the approval of such appointment by the ROC tax authorities and tax clearance certificates
or evidentiary documents issued by such tax guarantor may be required as conditions to such holder repatriating the profits derived
from the sale of HoldCo Common Shares. There is no assurance that a withdrawing holder will be able to appoint, and obtain approval
for, a tax guarantor in a timely manner.
In addition, under current ROC law, such
withdrawing holder is required to register with the TWSE and appoint a local agent in the ROC to, among other things, open a bank
account and open a securities trading account with a local securities brokerage firm, pay taxes, remit funds and exercise such
holder’s rights as a shareholder. Furthermore, such withdrawing holder must appoint a local bank or a local securities firm
to act as custodian for confirmation and settlement of trades, safekeeping of securities and cash proceeds and reporting and declaration
of information. Without satisfying these requirements, non-ROC withdrawing holders of HoldCo ADSs would not be able to hold or
otherwise subsequently sell HoldCo Common Shares on the TWSE or otherwise.
Pursuant to ROC Mainland Investors Regulations,
only qualified domestic institutional investors (“QDIIs”) or persons that have otherwise obtained the approval from
the Investment Commission of the MOEA and registered with the TWSE are permitted to withdraw and hold shares from a depositary
receipt facility. In order to hold such shares, such QDIIs are required to appoint an agent and custodian as required by the Regulations
Governing Securities Investment and Futures Trading in Taiwan by Mainland Area Investors. If the aggregate amount of HoldCo shares
held by any QDII or shares received by any QDII upon a single withdrawal account or multiple withdrawal accounts for 10.0% of HoldCo’s
total issued and outstanding shares, such QDII must obtain the prior approval from the MOEA. We cannot assure you that such approval
would be granted.
A different view of the ROC tax agency from our
current treatment of the ROC securities transaction tax might cause tax uncertainties to HoldCo shareholders
Uncertainty exists as to whether the
consideration received by ASE shareholders for the Share Exchange will be subject to the ROC securities transaction tax. In the
view of Baker & McKenzie, by reasonable interpretation of the ROC Mergers and Acquisitions Act based on current rules and
regulations promulgated by the ROC tax authority, the Share Exchange should be exempted from such tax under the ROC Mergers and
Acquisitions Act. HoldCo intends to issue the share consideration to ASE shareholders at the Effective Time without deducting
or withholding any ROC securities transaction tax. However, due to lack of precedents, ASE and Baker & McKenzie cannot assure
you that the ROC tax agency will not take a different view on this. In the event that the ROC tax agency decides to charge securities
transaction tax for the Share Exchange after the Effective Time, HoldCo will pay the tax and could demand reimbursement from former
ASE shareholders, i.e., Holdco shareholders at that time.
Restrictions on the ability to deposit HoldCo Common
Shares into HoldCo ADS facility may adversely affect the liquidity and price of HoldCo ADSs.
The ability to deposit HoldCo Common Shares
into HoldCo ADS facility is restricted by ROC law. A significant number of withdrawals of HoldCo Common Shares underlying HoldCo
ADSs would reduce the liquidity of the ADSs by reducing the number of ADSs outstanding. As a result, upon completion of the Share
Exchange, the prevailing market price of HoldCo ADSs on the NYSE may differ from the prevailing market price of HoldCo Common
Shares on the TWSE. Under current ROC law, no person or entity may deposit HoldCo Common Shares in the HoldCo ADS facility
without specific approval of the FSC, unless:
|
(1)
|
HoldCo pays stock dividends on its common shares;
|
|
(2)
|
HoldCo makes a free distribution of its common shares;
|
|
(3)
|
holders of HoldCo ADSs exercise preemptive rights in the event of capital increases; or
|
|
(4)
|
to the extent permitted under the HoldCo Deposit Agreement and the relevant custody agreement, investors purchase HoldCo Common
Shares, directly or through the depositary, on the TWSE, and deliver HoldCo Common Shares to the custodian for deposit into the
HoldCo ADS facility, or the shareholders of HoldCo deliver HoldCo Common Shares to the custodian for deposit into the HoldCo ADS
facility.
|
With respect to item (4) above, the HoldCo
Depositary may issue HoldCo ADSs against the deposit of HoldCo Common Shares only if the total number of HoldCo ADSs outstanding
following the deposit will not exceed the number of HoldCo ADSs previously approved by the FSC, plus any HoldCo ADSs issued pursuant
to the events described in items (1), (2) and (3) above.
In addition, in the case of a deposit of
HoldCo Common Shares requested under item (4) above, the depositary will refuse to accept deposit of HoldCo Common Shares if such
deposit is not permitted under any legal, regulatory or other restrictions notified by HoldCo to the HoldCo Depositary from time
to time, which restrictions may include blackout periods during which deposits may not be made, minimum and maximum amounts and
frequency of deposits.
Holders of HoldCo ADSs will not have the same voting
rights as HoldCo shareholders, which may affect the value of their HoldCo ADSs.
The voting rights of a holder of HoldCo
ADSs as to HoldCo Common Shares represented by its HoldCo ADSs will be governed by the HoldCo Deposit Agreement which will take
effect at or after the Effective Time and which form has been included as exhibit 4.2 in this proxy statement/prospectus. Holders
of HoldCo ADSs will not be able to exercise voting rights on an individual basis. If holders representing at least 51% of the HoldCo
ADSs outstanding at the relevant record date instruct the HoldCo Depositary to vote in the same manner regarding a resolution,
including the election of directors, the HoldCo Depositary will cause all HoldCo Common Shares represented by the HoldCo ADSs to
be voted in that manner. If the HoldCo Depositary does not receive timely instructions representing at least 51% of the HoldCo
ADSs outstanding at the relevant record date to vote in the same manner for any resolution, including the election of directors,
holders of HoldCo ADSs will be deemed to have instructed the HoldCo Depositary or its nominee to authorize all HoldCo Common Shares
represented by the HoldCo ADSs to be voted at the discretion of the Chairman of HoldCo or his designee, which may not be in the
interest of holders of HoldCo ADSs. Moreover, upon the completion of the Share Exchange, shareholders who own 1% or more of HoldCo
outstanding shares are entitled to submit one proposal to be considered at HoldCo annual general meetings of shareholders. However,
only holders representing at least 51% of HoldCo ADSs outstanding at the relevant record date are entitled to submit one proposal
to be considered at HoldCo annual general meetings of shareholders. Hence, only one proposal may be submitted on behalf of all
HoldCo ADS holders.
The right of holders of HoldCo ADSs to participate
in future rights offerings is limited, which could cause dilution to HoldCo ADS holders’ holdings.
HoldCo may from time to time distribute
rights to its shareholders, including rights to acquire its securities. Under the HoldCo Deposit Agreement, the HoldCo Depositary
will not offer holders of HoldCo ADSs those rights unless both the distribution of the rights and the underlying securities to
all HoldCo ADS holders are either registered under the Securities Act or exempt from registration under the Securities Act. Although
HoldCo may be eligible to take advantage of certain exemptions under the Securities Act available to certain foreign issuers for
rights offerings, there are no assurances that HoldCo will be able to establish an exemption from registration under the Securities
Act, and we are under no obligation to file a registration statement for any of these rights. Accordingly, holders of HoldCo ADSs
may be unable to participate in our rights offerings and may experience dilution of their holdings.
If the HoldCo Depositary is unable to sell
rights that are not exercised or not distributed or if the sale is not lawful or reasonably practicable, it will allow the rights
to lapse, in which case holders of HoldCo ADSs will receive no value for these rights.
Changes in exchange controls which restrict your
ability to convert proceeds received from your ownership of HoldCo ADSs may have an adverse effect on the value of your investment.
Under current ROC law, the HoldCo Depositary,
without obtaining approvals from the Central Bank of the Republic of China (Taiwan) or any other governmental authority or agency
of the ROC, may convert NT dollars into other currencies, including U.S. dollars, for:
|
·
|
the proceeds of the sale of HoldCo Common Shares represented by HoldCo ADSs or received as stock dividends from HoldCo Common
Shares and deposited into the depositary receipt facility; and
|
|
·
|
any cash dividends or distributions received from HoldCo Common Shares represented by HoldCo ADSs.
|
In addition, the HoldCo Depositary may
also convert into NT dollars incoming payments for purchases of HoldCo Common Shares for deposit in the HoldCo ADS facility against
the creation of additional HoldCo ADSs. The HoldCo Depositary may be required to obtain foreign exchange approval from the Central
Bank of the Republic of China (Taiwan) on a payment-by-payment basis for conversion from NT dollars into foreign currencies of
the proceeds from the sale of subscription rights for new HoldCo Common Shares. Although it is expected that the Central Bank of
the Republic of China (Taiwan) will grant this approval as a routine matter, there is no assurance that in the future any approval
will be obtained in a timely manner, or at all.
Exchange
Rates
The table below sets forth the exchange
rates of NT dollars against U.S. dollars set forth in the H.10 statistical release of the Federal Reserve Board for the periods
indicated.
|
|
Exchange
Rate
|
|
|
Average
|
|
High
|
|
Low
|
|
Period
End
|
2012
|
|
29.47
|
|
30.28
|
|
28.96
|
|
29.05
|
2013
|
|
29.73
|
|
30.20
|
|
28.93
|
|
29.83
|
2014
|
|
30.38
|
|
31.80
|
|
29.85
|
|
31.60
|
2015
|
|
31.80
|
|
33.17
|
|
30.37
|
|
32.79
|
2016
|
|
32.23
|
|
33.74
|
|
31.05
|
|
32.40
|
2017
|
|
|
|
|
|
|
|
|
June
|
|
30.26
|
|
30.46
|
|
30.07
|
|
30.38
|
July
|
|
30.39
|
|
30.61
|
|
30.18
|
|
30.20
|
August
|
|
30.23
|
|
30.35
|
|
30.07
|
|
30.13
|
September
|
|
30.13
|
|
30.37
|
|
29.93
|
|
30.33
|
October
|
|
30.25
|
|
30.44
|
|
30.12
|
|
30.12
|
November
|
|
30.08
|
|
30.21
|
|
29.97
|
|
29.98
|
December (through December 8, 2017)
|
|
30.02
|
|
30.04
|
|
29.98
|
|
30.02
|
______________________
Note: Annual averages were calculated by using
the average of the exchange rates on the last day of each month during the relevant year. Monthly averages were calculated by using
the average of the daily rates during the relevant month.
On December 8, 2017, the exchange rate
set forth in the H.10 statistical release of the Federal Reserve Board was NT$30.02 to US$1.00.
We make no representation that any NT dollar
or U.S. dollar amounts could have been, or could be, converted into U.S. dollars or NT dollars, as the case may be, at any particular
rate, or at all. Fluctuations in the exchange rate between NT dollars and U.S. dollars will affect the U.S. dollar equivalent of
the NT dollar price of ASE Common Shares.
Market Price
and Dividend Information
Market Price Information
ASE Common Shares are listed on the
TWSE under the stock code “2311.” The table below shows, for the periods indicated, the high and low closing prices
and the average daily volume of trading activity on the TWSE for ASE Common Shares. The closing price for ASE Common Shares on
the TWSE on December 13, 2017 was NT$ 38.85 per share.
|
Closing
Price per ASE Common Share
(in NT$)
|
|
High
|
|
Low
|
2012
|
31.10
|
|
20.15
|
2013
|
30.65
|
|
23.60
|
2014
|
41.00
|
|
26.80
|
2015
|
47.75
|
|
30.00
|
First quarter
|
47.75
|
|
36.65
|
Second quarter
|
46.65
|
|
39.70
|
Third quarter
|
42.10
|
|
30.00
|
Fourth quarter
|
39.00
|
|
33.40
|
2016
|
39.60
|
|
28.65
|
First quarter
|
38.30
|
|
33.75
|
Second quarter
|
36.95
|
|
28.65
|
Third quarter
|
39.60
|
|
34.60
|
Fourth quarter
|
38.80
|
|
32.20
|
2017
|
|
|
|
First quarter
|
39.90
|
|
32.80
|
Second quarter
|
39.40
|
|
37.00
|
June
|
39.40
|
|
37.30
|
Third quarter
|
40.85
|
|
35.60
|
July
|
40.85
|
|
38.55
|
August
|
40.30
|
|
36.40
|
September
|
37.15
|
|
35.60
|
Fourth quarter
|
|
|
|
October
|
38.10
|
|
36.35
|
November
|
41.75
|
|
36.40
|
December
(through December 13, 2017)
|
39.00
|
|
38.00
|
______________________
Source:
Bloomberg
ASE ADSs have been listed on the New
York Stock Exchange under the symbol “ASX” since September 26, 2000. The outstanding ASE ADSs are identified by the
CUSIP number 00756M404. The following table sets forth, for the periods indicated, the high and low closing prices and the average
daily volume of trading activity on the New York Stock Exchange for ASE ADSs and the highest and lowest of the daily closing values
of the New York Stock Exchange Index. The closing price for ASE ADSs on the New York Stock Exchange on December 13, 2017 was US$6.53
per ADS.
|
Closing
Price per ASE ADS
(in US$)
|
|
High
|
|
Low
|
2012
|
5.27
|
|
3.54
|
2013
|
5.35
|
|
3.91
|
2014
|
6.87
|
|
4.45
|
2015
|
7.89
|
|
4.69
|
First quarter
|
7.89
|
|
5.96
|
Second quarter
|
7.51
|
|
6.39
|
Third quarter
|
6.67
|
|
4.69
|
Fourth quarter
|
6.12
|
|
5.18
|
2016
|
6.21
|
|
4.41
|
First quarter
|
5.87
|
|
4.95
|
Second quarter
|
5.78
|
|
4.41
|
Third quarter
|
6.21
|
|
5.35
|
Fourth quarter
|
6.12
|
|
4.92
|
2017
|
|
|
|
First quarter
|
6.62
|
|
5.09
|
Second quarter
|
6.54
|
|
6.04
|
June
|
6.48
|
|
6.04
|
Third quarter
|
6.65
|
|
5.86
|
July
|
6.63
|
|
6.24
|
August
|
6.65
|
|
6.02
|
September
|
6.23
|
|
5.86
|
Fourth quarter
|
|
|
|
October
|
6.39
|
|
6.15
|
November
|
7.07
|
|
6.10
|
December
(through December 13, 2017)
|
6.53
|
|
6.35
|
______________________
Source:
Bloomberg
SPIL Common Shares are listed on the
TWSE under the stock code “2325.” The table below shows, for the periods indicated, the high and low closing prices
on the TWSE for SPIL Common Shares.
|
Closing
Price per SPIL Common Share
(in NT$)
|
|
High
|
|
Low
|
2012
|
36.50
|
|
26.80
|
2013
|
39.00
|
|
30.20
|
2014
|
55.30
|
|
35.40
|
2015
|
56.20
|
|
33.10
|
First quarter
|
56.20
|
|
47.20
|
Second quarter
|
52.40
|
|
45.00
|
Third quarter
|
47.45
|
|
33.10
|
Fourth quarter
|
52.40
|
|
39.65
|
2016
|
53.40
|
|
43.30
|
First quarter
|
52.70
|
|
48.35
|
Second quarter
|
53.40
|
|
43.30
|
Third quarter
|
48.55
|
|
46.30
|
Fourth quarter
|
48.60
|
|
46.00
|
2017
|
|
|
|
First quarter
|
49.90
|
|
47.25
|
Second quarter
|
50.80
|
|
48.00
|
June
|
50.70
|
|
48.60
|
Third quarter
|
50.40
|
|
47.25
|
July
|
50.40
|
|
48.95
|
August
|
50.00
|
|
47.75
|
September
|
48.50
|
|
47.25
|
Fourth quarter
|
|
|
|
October
|
48.75
|
|
47.80
|
November
|
50.20
|
|
47.70
|
December
(through December 13, 2017)
|
50.20
|
|
49.80
|
SPIL ADSs are listed on the NASDAQ
under the symbol “SPIL.” The table below shows, for the periods indicated, the high and low closing prices on the
NASDAQ for SPIL ADSs.
|
Closing
Price per SPIL ADS
(in US$)
|
|
High
|
|
Low
|
2012
|
6.04
|
|
4.52
|
2013
|
6.50
|
|
5.06
|
2014
|
8.88
|
|
5.62
|
2015
|
9.09
|
|
5.06
|
First quarter
|
9.09
|
|
7.46
|
Second quarter
|
8.49
|
|
7.30
|
Third quarter
|
7.55
|
|
5.06
|
Fourth quarter
|
8.05
|
|
6.16
|
2016
|
8.27
|
|
6.62
|
First quarter
|
8.21
|
|
7.16
|
Second quarter
|
8.27
|
|
6.62
|
Third quarter
|
7.68
|
|
7.19
|
Fourth quarter
|
7.57
|
|
7.13
|
2017
|
|
|
|
First quarter
|
8.13
|
|
7.24
|
Second quarter
|
8.36
|
|
7.83
|
June
|
8.35
|
|
7.83
|
Third quarter
|
8.24
|
|
7.81
|
July
|
8.24
|
|
7.92
|
August
|
8.17
|
|
7.81
|
September
|
7.81
|
|
7.81
|
Fourth quarter
|
|
|
|
October
|
8.04
|
|
7.81
|
November
|
8.36
|
|
7.80
|
December
(through December 13, 2017)
|
8.31
|
|
8.24
|
Dividends and Dividend Policy
ASE
ASE has historically paid dividends on
ASE Common Shares with respect to the results of the preceding year following approval by ASE shareholders at the annual general
meeting of shareholders. ASE has paid annual dividends on its common shares since 1989, except in 2002 and 2006 due to the losses
it incurred in the 2001 and 2005 fiscal years, respectively.
The following table sets forth the stock
dividends ASE paid during each of the years indicated and related information.
|
|
Cash Dividends per ASE Common
Share
|
|
Stock
Dividends per Common Share
(1)
|
|
Total ASE Common Shares Issued
as Stock Dividends
|
|
Outstanding
ASE Common
Shares on
Record
Date
(2)
|
|
Percentage of Outstanding
ASE Common Shares Represented by Stock Dividends
|
|
|
|
|
NT$
|
|
|
|
NT$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
|
1.05
|
|
|
|
–
|
|
|
|
–
|
|
|
|
7,611,579,786
|
|
|
|
–
|
|
2014
|
|
|
|
1.29
|
(3)
|
|
|
–
|
|
|
|
–
|
|
|
|
7,847,817,646
|
|
|
|
–
|
|
2015
|
|
|
|
2.00
|
|
|
|
–
|
|
|
|
–
|
|
|
|
7,900,130,996
|
|
|
|
–
|
|
2016
|
|
|
|
1.60
|
|
|
|
–
|
|
|
|
–
|
|
|
|
7,931,725,946
|
|
|
|
–
|
|
_________________________
|
(1)
|
Stock dividends were paid out from retained earnings and capital surplus. Holders of common shares receive as a stock dividend
the number of common shares equal to the NT dollar value per common share of the dividend declared multiplied by the number of
common shares owned and divided by the par value of NT$10 per share. Fractional shares are not issued but are paid in cash.
|
|
(2)
|
Aggregate number of ASE Common Shares outstanding on the record date applicable to the dividend payment. Includes ASE Common
Shares issued in the previous year under our employee bonus plan.
|
|
(3)
|
On June 26, 2014, ASE’s shareholders approved a cash dividend of NT$1.30 per share for 2013 earnings. On July 29, 2014,
the ASE Board resolved to adjust the cash dividend ratio to NT$1.29411842 because the number of outstanding ASE Common Shares had
changed as a result of the exercise of share options.
|
SPIL
SPIL may distribute dividends in any
year in which SPIL has current or retained earnings (excluding reserves). SPIL has historically paid dividends on the Shares with
respect to the results of the preceding year following approval by SPIL shareholders at the annual general meeting of shareholders.
SPIL has paid annual dividends on its Shares since 1995, except in 2002 and 2003 because it incurred losses in 2001 and the shareholders
did not resolve to declare a dividend in 2002. SPIL may also make distributions to its shareholders by capitalizing reserves,
including the legal reserve and capital surplus if it does not have losses.
The following table sets forth the stock
dividends SPIL paid during each of the years indicated and related information.
|
|
Cash
Dividends Per SPIL Common Share
|
|
Stock
Dividends per SPIL Common Share
(1)
|
|
Total
SPIL Common Shares Issued as Stock Dividends
(2)
|
|
Outstanding
SPIL Common
Shares at Year-End
|
|
|
|
|
NT$
|
|
|
|
NT$
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
|
1.67
|
(3)
|
|
|
–
|
|
|
|
–
|
|
|
|
3,116,361,139
|
|
2014
|
|
|
|
1.80
|
|
|
|
–
|
|
|
|
–
|
|
|
|
3,116,361,139
|
|
2015
|
|
|
|
3.00
|
|
|
|
–
|
|
|
|
–
|
|
|
|
3,116,361,139
|
|
2016
|
|
|
|
3.80
|
(4)
|
|
|
–
|
|
|
|
–
|
|
|
|
3,116,361,139
|
|
_________________________
|
(1)
|
Stock dividend is declared in NT dollar amount per common share. The number of shares received by a shareholder equals to the
NT dollar amount per common share of dividend declared multiplied by the number of shares owned by the shareholder and divided
by the par value of NT$10 per common share.
|
|
(2)
|
Total number of common shares issued as stock dividends include common shares issued from retained earnings and from capital
reserve.
|
|
(3)
|
Of which NT$0.30 per share is from capital reserve and NT$1.37 per common share is from earnings distribution.
|
|
(4)
|
Of which NT$1.0 per share is from our capital reserve and NT$2.80
per share is from earnings distribution.
|
Information
about the Companies
ASE
ASE is a company limited by shares incorporated
under the laws of the ROC. ASE’s services include semiconductor packaging, production of interconnect materials, front-end
engineering testing, wafer probing and final testing services, as well as integrated solutions for electronics manufacturing services
in relation to computers, peripherals, communications, industrial, automotive, and storage and server applications.
ASE Common Shares are traded on the TWSE
under the ticker “2311” and ASE ADSs are traded on the NYSE under the symbol “ASX.” ASE’s principal
executive offices are located at 26 Chin Third Road, Nantze Export Processing Zone, Nantze, Kaohsiung, Taiwan, Republic of China
and our telephone number at the above address is +886-7-361-7131.
SPIL
SPIL is a company incorporated
under
the ROC Company Law as a company limited by shares with its principal business address at No. 123, Sec. 3, Da Fong Road, Tantzu,
Taichung, Taiwan, Republic of China. The telephone number of SPIL’s principal executive office is 886-4-2534-1525. The name,
business address, present principal employment and citizenship of each director and executive officer of SPIL are set forth below.
HoldCo
It is expected that HoldCo will be a company
limited by shares incorporated under the laws of the ROC and will be formed at the Effective Time. HoldCo will initially serve
exclusively as the holding company for the ASE, SPIL, as well as their subsidiaries and investees.
It is expected that HoldCo Common Shares
will be traded on the TWSE and HoldCo ADSs will be traded on the NYSE. It is expected that HoldCo’s principal executive
offices will be located at 26 Chin Third Road, Nantze Export Processing Zone, Nantze, Kaohsiung, Taiwan, Republic of China and
its telephone number at the above address will be +886-7-361-7131.
Extraordinary
General Shareholders’ Meeting of ASE
General
The date, time and place of the ASE
EGM to vote for the Share Exchange is expected to be held at 10:00 A.M. on [DATE], 2018 (Taiwan time), at Zhuang Jing Auditorium,
600 Jiachang Road, Nantze Export Processing Zone, Nantze District, Kaohsiung City, Taiwan, Republic of China. Holders of ASE Common
Shares will be entitled exercise voting rights by electronic means or by attending the ASE EGM in person or by proxy, if they
are recorded on ASE’s stockholder register on [DATE], 2018. Holders of ASE ADSs will be entitled to instruct the ASE Depositary
(Citibank), as to how to vote their underlying shares of ASE Common Shares at the ASE EGM in accordance with the procedures set
forth in this prospectus, if those holders were recorded on such ASE Depositary’s register of ASE ADS holders on [DATE],
2018.
This proxy statement/prospectus will be
filed with the SEC no later than 20 business days prior to the date of the ASE EGM. ASE will publish the notice of convocation
for such ASE EGM on the MOPS in Taiwan, and distribute the notice of convocation to all holders of ASE Common Shares by mail at
least 15 calendar days prior to the date of the ASE EGM. The ASE Depositary will send to holders of ASE ADSs a notice and voting
instruction from the depositary prior to the date of the ASE EGM. The form of depositary notice to holders of ASE ADSs and the
form of voting instructions for use by holders of ASE ADSs are included in this proxy statement/prospectus as Exhibit 99.1 and
Exhibit 99.2, respectively.
The purpose of the ASE EGM is to vote
on the following proposals:
In connection with ASE
|
·
|
Proposal
1. To consider and to vote upon the joint share exchange agreement entered into between
ASE and SPIL on June 30, 2016 and as supplemented by the Supplemental Agreement dated
December 14, 2017 (the “Joint Share Exchange Agreement”) and the proposed
share exchange and the other transactions contemplated by the Joint Share Exchange Agreement
|
|
·
|
Proposal
2. To consider and to vote upon the amendment to the Procedures for Lending Funds
to Other Parties of ASE
|
|
·
|
Proposal
3. To consider and to vote upon the amendment to the Procedures of Making the Endorsement
and Guarantees of ASE
|
|
·
|
Proposal
4. To consider and to vote upon the amendment to the Procedures for Acquisition or
Disposal of Assets of ASE
|
In connection with HoldCo
|
·
|
Proposal
1. To consider and to vote upon the adoption of the articles of incorporation of HoldCo
|
|
·
|
Proposal
2. To consider and to vote upon the Rules of Procedure for Shareholders' Meetings
of HoldCo
|
|
·
|
Proposal
3. To consider and to vote upon the Rules Governing the Election of Directors and
Supervisors of HoldCo
|
|
·
|
Proposal
4. To consider and to vote upon the Procedures for Lending Funds to Other Parties
of HoldCo
|
|
·
|
Proposal
5. To consider and to vote upon the Procedures of Making the Endorsement and Guarantees
of HoldCo
|
|
·
|
Proposal
6. To consider and to vote upon the Procedures for Acquisition or Disposal of Assets
of HoldCo
|
|
·
|
Proposal
7. To consider and elect the members of the board of directors and supervisors of
HoldCo
|
|
·
|
Proposal
8. To consider and to vote upon the proposal to waive the non-competition clauses
applicable to newly elected directors of HoldCo
|
Voting
Record Date
Holders of ASE Common Shares will be entitled
exercise voting rights by electronic means or by attending the ASE EGM in person or by proxy. You may vote at the ASE EGM of ASE
only if you are registered as a holder of one or more of ASE Common Shares in ASE’s register of shareholders on [DATE], 2018
(Taiwan Time).
As of November 30, 2017, there were
8,727.813.764 ASE Common Shares issued and outstanding, including 552,280,665 ASE Common Shares represented by ASE ADSs. Other
than the proposal for the election of directors and supervisors of ASE Industrial Holding Co., Ltd. which is through cumulative
voting, each ASE shareholder is entitled to one vote per share for the proposals raised at the ASE EGM.
Vote Required
The required quorum to vote on the Share
Exchange and other transactions contemplated by the Joint Share Exchange Agreement at the ASE EGM is a two-third majority of the
total issued and outstanding common shares held by shareholders of ASE. The affirmative vote of shareholders representing a majority
of the voting rights of the shareholders of ASE represented at the ASE EGM is required to approve the Share Exchange and other
transactions contemplated by the Joint Share Exchange Agreement. Alternatively, if such quorum cannot be constituted, the resolution
for the Share Exchange and other transactions contemplated by the Joint Share Exchange Agreement may be adopted by an affirmative
vote representing at least two-thirds of the voting rights at the ASE EGM of shareholders for which shareholders of at least a
majority of issued and outstanding common shares are present. Each shareholder is entitled to one vote per share.
Voting interest by ASE Directors
and Officers
As of November 30, 2017, 2,163,879,853
ASE Common Shares, or approximately 24.8% of the outstanding shares entitled to vote, were beneficially owned by ASE’s directors
and executive officers. To our knowledge, the directors and executive officers intend to support the Share Exchange proposal at
the ASE EGM.
Voting by ASE Depositary
As of November 30, 2017, approximately
6.3% of the total number of outstanding ASE Common Shares having voting rights were represented by ASE ADSs.
At the request of ASE, the ASE Depositary
(Citibank) has fixed the close of business in New York on [DATE], 2018 as the date for determining those holders of ASE ADSs entitled
to give voting instructions to the ASE Depositary. The ASE Depositary will send to holders of ASE ADSs as of that date a voting
instruction card and a notice which outlines the procedures those holders must follow to give proper voting instructions to the
ASE Depositary.
In accordance with and subject to the terms
of ASE Deposit Agreement, holders of ASE ADSs have no individual voting rights with respect to the ASE Common Shares represented
by their ASE ADSs. Pursuant to the ASE Deposit Agreement, each holder of ASE ADSs is deemed to have authorized and directed the
ASE Depositary to appoint the Chairman of ASE or his/her designee as Voting Representative of the ASE Depositary, the custodian
or the nominee who is registered in the ROC as representative of the holders ASE ADSs to vote the ASE Common Shares represented
by ASE ADSs, as more fully described below.
In accordance with and subject to the
terms of the ASE Deposit Agreement, if holders of ASE ADSs together holding at least 51% of all the ASE ADSs outstanding as of
the record date set by the ASE Depositary for the ASE EGM to instruct the ASE Depositary, prior to the ASE ADS voting instructions
deadline, to vote in the same manner with respect to any of the proposals to be voted on at the EGM, the ASE Depositary shall
notify the Voting Representative and appoint the Voting Representative as the representative of the ASE Depositary and the holders
of ASE ADSs to attend the ASE EGM and vote, as to such proposals, all ASE Common Shares represented by ASE ADSs outstanding in
the manner so instructed by such holders. If voting instructions are received from an ASE ADS holder by the ASE Depositary as
of the ASE ADS voting instructions deadline which are signed but without further
indication
as to voting instructions, the ASE Depositary shall deem such holder to have instructed a vote in favor of the items set forth
in such instructions.
In accordance with and subject to the
terms of the ASE Deposit Agreement, if, for any reason, the ASE Depositary has not, prior to the ASE ADS voting instructions deadline,
received instructions from holders of ASE ADSs together holding at least 51% of all ASE ADSs outstanding as of the record date
set by the ASE Depositary for the ASE EGM to vote in the same manner with respect to any of the proposals to be voted on at the
EGM, the holders of all ASE ADSs shall be deemed to have authorized and directed the ASE Depositary to give a discretionary proxy
to the Voting Representative, as the representative of the holders of ASE ADSs, to attend the ASE EGM and vote, as to such proposals,
all the ASE Common Shares represented by ASE ADSs then outstanding in his/her discretion; provided, however, that the ASE Depositary
will not give a discretionary proxy as described if it fails to receive under the terms of the ASE Deposit Agreement a satisfactory
opinion from ASE’s counsel prior to the ASE EGM. In such circumstances, the Voting Representative shall be free to exercise
the votes attaching to the ASE Common Shares represented by ASE in any manner he/she wishes, which may not be in the best interests
of the ASE ADS holders. The Voting Representative has informed ASE that he plans as of the date of this proxy statement/prospectus
to vote in favor of all of the proposals at the ASE EGM, although he has not entered into any agreement obligating him to do so.
Voting Mechanism
Holders of ASE Common Shares are entitled
to exercise voting rights by electronic means or by attending the ASE EGM in person or by proxy.
You may exercise your voting right by electronic
means during the Electronic Voting Period. Shareholders who intend to exercise voting right electronically must log in to the website
maintained by the Taiwan Depository & Clearing Corporation (https://www.stockvote.com.tw) and inputting an exercise code. Internet
voting is available only in the Chinese language.
You may also exercise your voting rights
by attending the ASE EGM in person or by proxy using a duly authorized power of attorney in the prescribed form attached to the
notice of convocation distributed by ASE prior to the ASE EGM.
Revocation
Shareholders who previously exercised their
voting right electronically may revoke or submit a subsequent vote via the electronic voting website anytime within the Electronic
Voting Period. Once an electronic voting has been revoked, such shareholder may attend the ASE EGM in person or by proxy.
Shareholders who previously presented a
valid proxy to ASE or exercised their voting rights electronically but then wish to attend the ASE EGM in person are required to
revoke their proxy in writing addressed to ASE or revoke your electronic vote by logging in to the electronic voting website at
least two (2) calendar days prior to the ASE EGM .Otherwise, the voting right exercised by their proxy or through the electronic
voting website at the ASE EGM will prevail.
Solicitation of Proxies, Consents or Authorizations.
Under ROC law, ASE is prohibited from
soliciting proxies, consents or authorizations at its shareholders’ meetings, including the ASE EGM at which the Share Exchange
and other transactions contemplated by the Joint Share Exchange Agreement will be voted upon.
However, ASEE, a shareholder of ASE
beneficially holding approximately 15.7% of the total outstanding share capital of ASE as of the date of this proxy statement/prospectus,
is soliciting proxies in favor of the authorization and approval of the Share Exchange and other transactions contemplated by
the Joint Share Exchange Agreement prior to the ASE EGM. ASEE is controlled by ASE’s Chairman and Chief Executive Officer
Jason C.S. Chang. ASEE will pay its own cost of soliciting proxies, including the cost of mailing the proxy statement. In addition
to solicitation by use of the mails, proxies may be solicited by each of ASEE’s directors and executive officers, each of
whom is a participant in this solicitation, in person or by telephone or other means of communication. These persons will not
receive additional compensation, but may be reimbursed for reasonable out-of-pocket expenses in connection with this solicitation.
ASEE will make arrangements with brokerage houses, custodians, nominees and
fiduciaries
to forward proxy solicitation materials to beneficial owners of shares held of record by them. ASEE will also reimburse these
brokerage houses, custodians, nominees and fiduciaries for their reasonable expenses incurred in forwarding the proxy materials.
The Joint
Share Exchange Agreement
Summary of the Joint Share Exchange Agreement
The following section contains a
summary of certain provisions of the joint share exchange agreement dated June 30, 2016, as supplemented by the Supplemental Agreement. The following summary is qualified in its entirety by reference to the Joint
Share Exchange Agreement itself, which is incorporated herein by reference and included in this proxy statement/prospectus as
Annex A-1 and Annex A-2. We urge you to read the Joint Share Exchange Agreement carefully and in its entirety, as it is the legal
document governing the Share Exchange.
Structure of the Share Exchange
The Share Exchange
Pursuant to the Joint Share Exchange
Agreement, all of the issued and outstanding shares of ASE and SPIL will be transferred to a newly formed holding company, HoldCo,
incorporated by ASE. HoldCo will issue new shares to ASE shareholders and pay a cash consideration to SPIL shareholders, each
as described below. At the Effective Time, ASE and SPIL will become wholly owned subsidiaries of HoldCo, retaining their respective
legal personalities.
HoldCo Articles of Incorporation
The Articles of Incorporation appended
to the Joint Share Exchange Agreement will be proposed by the ASE board to the meeting of HoldCo’s incorporators for adoption.
Once the HoldCo incorporators’ meeting passes the resolution to adopt the Articles of Incorporation, the Articles of Incorporation
will become effective on the date when HoldCo is incorporated (which shall be the Effective Time).
Directors and Officers of HoldCo
Upon completion of the Share Exchange,
the directors of SPIL will continue to serve as directors for their respective terms, and ASE has undertaken to reelect or appoint
the directors whose terms end in June 2017, if they have not been found to violate their respective fiduciary duties. SPIL’s
chairman (being Mr. Lin or his successor) and president (being Mr. Chi-Wen Tsai or his successor) are expected to serve as directors
of the HoldCo. The directors of SPIL are also authorized to retain the executive officers of SPIL as long as the fiduciary duties
of the directors can be discharged.
Consideration
At the Effective Time: (i) each issued
SPIL Common Share immediately prior to the Effective Time (including SPIL’s treasury shares), will automatically be transferred
to HoldCo and converted into the right to receive NT$55 in cash; and (ii) each SPIL ADS issued and outstanding immediately prior
to the Effective Time, will be surrendered and converted into the right to receive NT$275.
In addition, at the Effective Time: (i)
each issued ASE Common Share (including ASE’s treasury shares) immediately prior to the Effective Time, will be exchanged,
in accordance with the exchange ratio, for 0.5 HoldCo Common Shares; and (ii) each ASE ADS issued and outstanding immediately prior
to the Effective Time, will be surrendered in exchange for, in accordance with the exchange ratio, 1.25 HoldCo ADSs (following
the Share Exchange, 1 HoldCo ADS will represent 2 HoldCo Common Shares, in contrast to the current ASE ADS, which represents 5
ASE Common Shares).
Treatment of Treasury Shares and Equity-Linked Securities
At the Effective Time, provided that
the ASE 2015 Convertible Bonds and the ASE 2013 Convertible Bonds have not been redeemed, repurchased or repaid by ASE or converted
and cancelled by the bondholders, HoldCo shall become the successor to both the ASE 2015 Convertible Bonds and the ASE 2013 Convertible
Bonds pursuant to a supplemental indenture to be entered into among ASE, HoldCo and the trustee for each series of bonds. After
the Effective time, provided that the ASE 2015 Convertible Bonds and the ASE 2013 Convertible Bonds have not
been
redeemed, repurchased or repaid by ASE or converted and cancelled by the bondholders, ASE shall continue to serve as an obligor
under any outstanding ASE 2015 Convertible Bonds and ASE 2013 Convertible Bonds.
Treatment of the SPIL Convertible Bonds
If any of SPIL Convertible Bonds have
not been redeemed or repurchased by SPIL and cancelled or converted by holders of the SPIL Convertible Bonds prior to the Effective
Time, ASE and HoldCo jointly warrant to SPIL that HoldCo, as co-obligors with SPIL pursuant to a supplemental indenture to be
entered into among SPIL, HoldCo and the trustee of the SPIL Convertible Bonds, will pay Cash Consideration (subject to additional
adjustments according to the terms of the Joint Share Exchange Agreement and applicable laws), without interest and net of any
applicable withholding tax, to such holders of SPIL Convertible Bonds for each SPIL Common Share they are entitled to receive
if they exercise their conversion rights after the Effective Time.
Treatment of Fractional Shares
HoldCo will not issue any fractional shares
of HoldCo Common Shares or HoldCo ADSs pursuant to the Share Exchange. Instead, ASE will aggregate the fractional entitlements
and sell the aggregated ASE Common Shares using the closing price of ASE Common Shares on the TWSE on the trading day immediately
preceding the Effective Time. Each holder of ASE Common Shares who otherwise would have received a fraction of a share of HoldCo
Common Shares, will be entitled to receive, on a proportionate basis, the cash proceeds from the sale of such fractional shares.
Adjustments to the Consideration
The Cash Consideration of NT$55 per
SPIL Common Share and NT$275 per SPIL ADS will be adjusted if SPIL issues any shares or cash dividends between the date of the
Joint Share Exchange Agreement and the Effective Time, provided, that the Cash Consideration will not be adjusted if SPIL’s
cash dividends in 2017, in aggregate, are less than 85% of SPIL’s after-tax net profit for the year 2016. In 2017, SPIL
made a dividend distribution of NT$1.75 per share, which represented 55% of its after-tax net profit for the year 2016. Therefore,
no adjustments were made to the Cash Consideration.
ASE and SPIL will negotiate changes
to the Cash Consideration in good faith as a result of the occurrence of certain events set forth below to the extent such events
occur prior to the Effective Time and result in a reduction, individually or in aggregate, in SPIL’s consolidated net book
value by 10% or more compared to SPIL’s net book value in its consolidated audited financial statements as of March 31,
2016 (excluding any such decrease resulting from dividends distributed by SPIL):
|
·
|
issuance
of equity-linked securities by SPIL (except for any shares of SPIL issued as a result
of the exercise of conversion rights of holders of SPIL Convertible Bonds;
|
|
·
|
disposal of material assets by SPIL;
|
|
·
|
occurrence of a major disaster causing a material adverse effect to SPIL, material technical changes or other circumstances
affecting SPIL’s shareholders’ interests or the share price of SPIL Common Shares; and
|
|
·
|
repurchase of treasury shares by SPIL, except for the repurchase of SPIL Common Shares following the exercise of appraisal
rights by SPIL shareholders in connection with the Share Exchange.
|
As
of the date of this proxy statement/prospectus, ASE and SPIL are not aware of any events requiring the parties to adjust the Cash
Consideration.
Appraisal Rights
Without prejudice to the appraisal rights
described below in the section entitled “Rights of Dissenting Shareholders,” if a SPIL shareholder or ASE shareholder
exercises its appraisal rights, SPIL or ASE, respectively, will repurchase such shares in accordance with applicable law and regulations.
Closing of the Share Exchange
Subject to the satisfaction or waiver (as
applicable) of the conditions to closing of the Share Exchange, the Share Exchange is expected to occur on a date to be agreed
by HoldCo’s board of directors, the SPIL Board and the ASE Board, which date will be agreed upon and approved by such parties
within 10 days of receipt of the approvals of their respective general shareholders’ meetings to effect the Share Exchange.
Within three (3) business days after
the Effective Time, HoldCo will pay the full Cash Consideration to a dedicated capital account opened by SPIL’s stock transfer
agent. ASE and HoldCo shall be jointly and severally liable for such payment obligation.
Representations and Warranties
The Joint Share Exchange Agreement contains
various customary representations and warranties that SPIL makes to ASE relating to, among other things:
|
·
|
SPIL’s due incorporation, valid existence and authority to carry on its business operations;
|
|
·
|
capitalization of SPIL;
|
|
·
|
absence of violations of: (i) current laws or regulations of the ROC, (ii) judgments, orders or dispositions by courts, (iii)
organizational documents, or (iv) contracts, representations, warranties or other obligations of SPIL, in each case as a result
of entry into the Joint Share Exchange Agreement;
|
|
·
|
authority to enter into the Joint Share Exchange Agreement;
|
|
·
|
enforceability of the Joint Share Exchange Agreement;
|
|
·
|
approval of the SPIL Board and/or shareholders’ meeting in connection with the Share Exchange;
|
|
·
|
the absence of litigation;
|
|
·
|
the absence of undisclosed liabilities;
|
|
·
|
absence of new material debts since December 31, 2015;
|
|
·
|
absence of default under contracts;
|
|
·
|
compliance with laws; and
|
|
·
|
accuracy of materials provided to prepare and file this proxy statement/prospectus.
|
The Joint Share Exchange Agreement contains
various customary representations and warranties that ASE makes to SPIL relating to, among other things:
|
·
|
ASE’s
due incorporation, valid existence and authority to carry on its business operations;
|
|
·
|
absence of violations of: (i) current laws or regulations of the ROC, (ii) judgments, orders or dispositions by courts, (iii)
organizational documents, or (iv) contracts, representations, warranties or other obligations of ASE, in each case as a result
of entry into the Joint Share Exchange Agreement;
|
|
·
|
authority to enter into the Joint Share Exchange Agreement;
|
|
·
|
enforceability of the Joint Share Exchange Agreement; and
|
|
·
|
approval of the ASE Board and/or meeting of ASE’s shareholders in connection with the Share Exchange.
|
The Joint Share Exchange Agreement contains
various customary representations and warranties that ASE agrees to cause HoldCo to make to SPIL relating to, among other things:
|
·
|
HoldCo’s due incorporation, valid existence and authority to carry on its business operations;
|
|
·
|
absence of violations of: (i) current laws or regulations of the ROC, (ii) judgments, orders or dispositions by courts, (iii)
organizational documents, or (iv) contracts, representations, warranties or other obligations of HoldCo, in each case as a result
of entry into the Joint Share Exchange Agreement; and
|
|
·
|
approval of HoldCo’s incorporators’ meeting in connection with the Share Exchange.
|
Many of the representations and warranties
of each party in the Joint Share Exchange Agreement are qualified by knowledge, materiality thresholds or “material adverse
effect.” SPIL’s representations and warranties are also qualified by information in disclosure schedules and its publicly
available disclosures filed with the Taiwan Financial Supervisory Commission, the TWSE and the SEC.
For purposes of the Joint Share Exchange
Agreement, a “material adverse effect” to ASE or SPIL means any change, development, incident, matter, effect or fact
that, individually or in aggregate, results in a material adverse effect on SPIL and its subsidiaries, or ASE and its subsidiaries,
as applicable, taken as a whole, where “material” means the occurrence of such events that, individually or in the
aggregate, result in a decrease in the consolidated net book value of SPIL, or ASE, as applicable, by 10% or more, compared to
SPIL’s or ASE’s, as applicable, consolidated audited financial statements as of March 31, 2016; provided that, for
the purposes of this definition, in no event will any of the following, individually or in the aggregate, be regarded as having
or be taken into account in determining whether there has been a material adverse effect:
|
·
|
a change in capital market conditions or general economic conditions;
|
|
·
|
a change in geopolitical conditions occurring after the date the Joint Share Exchange Agreement was executed, or outbreak or
escalation of any conflict, or any acts of terrorism or war;
|
|
·
|
a force majeure event occurring after the date the Joint Share Exchange Agreement was executed;
|
|
·
|
any change in applicable law after the date the Joint Share Exchange Agreement was executed;
|
|
·
|
any change of the industry in which the party or its subsidiaries operate;
|
|
·
|
the failure, in and of itself, to meet any predictions, forecasts, projections or estimates of revenue, profits or other financial
or operational targets, or a change of market price, credit rating or trading volume of the party’s securities, provided
that the directors of the party have met their duties of care and loyalty;
|
|
·
|
the announcement of the execution of the Joint Share Exchange Agreement or the consummation of the Share Exchange, including
any transaction-related litigation, any actions required by the covenants in the Joint Share Exchange Agreement, any loss of or
change of relationship with any customer, supplier, distributor or other business partners of the party or its subsidiaries, or
any loss of any employees or senior management, provided that the directors of the party have met their duties of care and loyalty;
and
|
|
·
|
in the case of ASE only, any internal restructuring of ASE and/or its subsidiaries.
|
The representations and warranties of each
of the parties to the Joint Share Exchange Agreement will terminate upon the Effective Time or termination of the Joint Share Exchange
Agreement in accordance with its terms
Pre-Closing Covenants and Agreements
Conduct of Business of SPIL Pending Closing
From the date of execution of the Joint
Share Exchange Agreement until the Effective Time, SPIL will not, and will not procure its subsidiaries to, among other matters:
|
·
|
issue any
equity-linked securities (other than shares issued as a result of the exercise of conversion
rights by holders of SPIL Convertible Bonds); or
|
|
·
|
directly
or indirectly repurchase, individually or through any third party, any shares or equity-linked
securities, or reduce its share capital or enter into any plan of dissolution, or make
any filings in connection with restructuring, settlement or bankruptcy, except for the
repurchase of shares from shareholders exercising appraisal rights or in connection with
the redemption of SPIL Convertible Bonds.
|
Superior Proposals
Except (i) if required by a court judgment,
arbitral award, approval or order, administrative decision or burden/condition approved by both ASE and SPIL by competent authorities
(including the TWSE, TFTC, FTC, the MOFCOM or the SEC), or (ii) if SPIL receives a Superior Proposal (as described below), SPIL
has agreed that between the date of the Joint Share Exchange Agreement and the Effective Time, it will not, and it will not procure
its subsidiaries to, and none of its directors, managers, employees, agents or representatives may, offer or agree to enter into,
or execute, any contract, agreement or other arrangement with any third party in respect of any of the following transactions (an
“Alternate Transaction”):
|
·
|
any transaction that may involve a spin-off, purchase or sale of SPIL or any other company’s shares of a non-financial
investment nature;
|
|
·
|
a lease of all SPIL’s businesses to a third party, a joint operation with a third party, or the acquisition of the entire
business or assets from a third party (except for the acquisition of the entire business or assets from a third party in an aggregate
amount less than NT$500,000,000);
|
|
·
|
any merger or acquisition that does not involve the issue of shares in HoldCo;
|
|
·
|
any sale of any or all material assets or businesses of SPIL’s wholly owned subsidiaries; and
|
|
·
|
any disposal of any interest in any material assets or businesses, or exclusive licenses of material patents or technologies,
in each case of SPIL’s wholly owned subsidiaries.
|
For purposes of the Joint Share Exchange
Agreement, “Superior Proposal” means a
bona fide
, unsolicited written offer to SPIL to enter into any Alternate
Transaction, made by a party other than ASE, SPIL or any of SPIL’s directors, managers, employees, agents or representatives,
where the terms and conditions of such an offer are considered to be more favorable to SPIL and SPIL’s shareholders than
the terms and conditions of the Share Exchange, as evidenced by opinions separately issued by a renowned investment bank and law
firm appointed by SPIL’s audit committee. If SPIL receives a Superior Proposal from a third party the conditions of which,
in the respective opinions of SPIL’s audit committee and the SPIL Board, are more favorable than those of the Share Exchange,
SPIL will notify ASE in writing of such superior proposal and furnish ASE with details of the entire Superior Proposal. From the
fifth business day following the delivery of such notice to ASE, SPIL will be permitted
to
negotiate with, propose to, inquire with, deliberate with, contact, discuss with, offer to or consult with such third party. ASE
and SPIL agree that if SPIL does not consummate the Share Exchange due to its acceptance of a Superior Proposal, SPIL will pay
to ASE a termination fee in the amount of NT$17 billion.
Other Pre-closing Covenant of SPIL
After ASE issues to SPIL, in connection
with the payment of entire amount of the cash consideration under the Joint Share Exchange Agreement, the financing plan and a
highly confident letter in respect of the financing of the Transaction issued by banks conforming to the market practice, SPIL
shall in its SEC filings recommend to its shareholders to vote in favor of approving the Joint Share Exchange Agreement and the
Transaction.
Regulatory Approvals
ASE and HoldCo have agreed to use commercially
reasonable efforts to, and SPIL has agreed to use reasonable efforts to, in each case, obtain all approvals relating to the Share
Exchange from competent authorities. SPIL has agreed to use commercially reasonable efforts to assist ASE and HoldCo in making
all filings and notifications and providing all information to competent authorities, including making all required filings with
the TFTC, MOFCOM and the FTC. In addition, SPIL, ASE and HoldCo have agreed to comply with the Taiwan Fair Trade Act and all relevant
laws.
ASE, HoldCo and SPIL have agreed to act
in good faith and with goodwill in deciding, jointly, whether to accept any conditions or burdens imposed by any of the TFTC, the
FTC or MOFCOM as a condition to obtaining approvals or avoiding a legal challenge from such authorities. ASE and SPIL have agreed
to comply with any such conditions or burdens agreed by ASE and SPIL. Following the Effective Time, ASE, HoldCo and SPIL will comply
with any conditions or burdens imposed by the TFTC, the FTC or MOFCOM, which ASE and SPIL have agreed to.
Covenants of ASE Pending Closing
Except (i) if SPIL has materially breached
any of its representations, warranties or covenants under the Joint Share Exchange Agreement, (ii) if there is any action taken
by SPIL that would prevent the consummation of the Share Exchange without just cause, or (iii) where SPIL’s directors have
breached their duty of care or loyalty in relation to the Share Exchange, in each case during the period from the execution of
the Joint Share Exchange Agreement to the Effective Time, ASE (and, if applicable, HoldCo) have agreed to:
|
·
|
support the candidates for SPIL’s 13
th
board of directors nominated by the SPIL Board when SPIL re-elects
its board of directors in June 2017;
|
|
·
|
not intervene in the operation of SPIL and to support the motions put forward by SPIL’s Board at SPIL’s shareholders’
meeting, including by abstaining from voting on any motion that threatens SPIL’s interests and to not solicit proxies or
seek to replace SPIL’s directors, including by convening an extraordinary general meeting of SPIL shareholders, and no current
or former director of ASE or any of its subsidiaries, or their spouses, other relatives and certain other persons may serve as
a director of SPIL;
|
|
·
|
maintain the competition between, and the respective independence of, ASE and SPIL, without the hiring of any of SPIL’s
employees by ASE; and
|
|
·
|
not purchase or acquire shares in SPIL or increase its interest in SPIL in any manner that violates applicable law; provided
that, for any shares in SPIL acquired by ASE in accordance with applicable law between the date the Joint Share Exchange Agreement
was executed and the Effective Time, (i) ASE may dispose of such shares freely for financial purposes, provided that the disposed
shares are in aggregate less than 10% of the total issued and outstanding share capital of SPIL, and (ii) ASE may transfer shares
of SPIL to persons who do not operate any businesses in the integrated circuit packaging industry; provided that if the transferred
shares are in aggregate more than 10% of the total issued and outstanding share capital of SPIL, ASE will obtain SPIL’s prior
written consent to such a transfer.
|
(collectively, the “ASE Surviving Covenants”)
Shareholders’ Meeting
SPIL and ASE, respectively, will cause
an extraordinary general meeting of its shareholders to be duly called and held, on the same date, to approve the Joint Share Exchange
Agreement and the Share Exchange. SPIL and ASE will jointly determine the date of such extraordinary general meetings upon receiving
antitrust clearance or approvals from any two of the TFTC, MOFCOM and FTC. Such date shall be no later than seventy (70) calendar
days after antitrust clearance or approvals from each of the TFTC, MOFCOM and FTC have been obtained.
In addition, from the business day immediately
following the date on which the SEC confirms that it has no further comments on the respective SEC filing documents required for
SPIL and ASE, each of SPIL and ASE will take all necessary actions to call an extraordinary general meeting of its shareholders.
The date of such extraordinary general meetings shall be no later than seventy (70) calendar days after the date on which the SEC
confirms that it has no further comments on the respective SEC filings documents required for SPIL and ASE.
Financing
ASE shall, before SPIL’s submission
of Schedule 13e-3 to the SEC, confirm with SPIL the types and composition of ASE’s and HoldCo’s funding sources and
present proof documentation in respect of funding sources (including, but not limited to, the financing plan and a highly confident
letter conforming to the market practice and issued by bank(s) financing the Share Exchange) that can demonstrate ASE’s and
HoldCo’s ability to fully pay for the consideration of the Share Exchange.
Conditions to Consummation of the Share Exchange
The obligations of ASE, SPIL and HoldCo
to consummate the Share Exchange are subject to the satisfaction of the following conditions:
|
·
|
ASE and SPIL will each have obtained unconditional approval of the Share Exchange at their respective general shareholders’
meetings;
|
|
·
|
receipt of approvals from all relevant competent authorities, including, but not limited to, (i) the TWSE and the SEC (ii)
the TFTC and MOFCOM and (iii) the FTC completing its investigation without seeking an injunction prohibiting the Share Exchange
(in the case of (ii) and (iii), including approvals or consents of conditions imposed by such authorities that both ASE and SPIL
have agreed to accept); and
|
|
·
|
no order (or agreement with the FTC) is in effect and enforceable prohibiting, enjoining or rendering illegal the consummation
of the Share Exchange, and no law shall have been enacted or enforced after the date the Joint Share Exchange Agreement was executed
rendering illegal or prohibiting the consummation of the Share Exchange; provided that the enforcement of an order or law shall
not include the decision by a governmental entity to extend the waiting period or initiate an investigation under antitrust laws
or other applicable law.
|
In addition, ASE’s and HoldCo’s
obligations to consummate the Share Exchange are subject to the satisfaction or waiver by ASE and HoldCo of the following additional
conditions:
|
·
|
all representations and warranties of SPIL are true and accurate as of the date the Joint Share Exchange Agreement was executed
and as of the Effective Time, except to the extent no material adverse effect on SPIL has occurred;
|
|
·
|
SPIL has performed in all material respects all obligations and undertakings required to be performed by it under the Joint
Share Exchange Agreement prior to the Effective Time;
|
|
·
|
no material adverse effect to SPIL shall have occurred prior to the Effective Time; and
|
|
·
|
prior to the Effective Time, no force majeure events will have occurred which, individually or in aggregate, result in a decrease
in SPIL’s consolidated net book value by 30% or more, relative to SPIL’s net book value in its consolidated audited
financial statements as of March 31, 2016.
|
In addition, SPIL’s obligation to
consummate the Share Exchange is subject to the satisfaction or waiver of the following additional conditions:
|
·
|
all representations and warranties of ASE are true and accurate as of the date the Joint Share Exchange Agreement was executed
and as of the Effective Time, except to the extent no material adverse effect on ASE has occurred;
|
|
·
|
all representations and warranties of HoldCo are true and accurate as of the Effective Time, except to the extent no material
adverse effect on HoldCo has occurred;
|
|
·
|
ASE and HoldCo have performed in all material respects all obligations and undertakings required to be performed by each of
them under the Joint Share Exchange Agreement prior to the Effective Time;
|
|
·
|
no material adverse effect to ASE will have occurred prior to the Effective Time; and
|
|
·
|
prior to the Effective Time, no force majeure events will have occurred which, individually or in aggregate, result in a decrease
in ASE’s consolidated net book value by 30% or more, relative to ASE’s net book value in its consolidated audited financial
statements as of March 31, 2016.
|
The consummation of the Share Exchange
is subject to the satisfaction or waiver of all the conditions set forth above on or prior to the Long Stop Date. If the closing
of the Share Exchange cannot be completed due to the failure to satisfy the conditions set forth above on or prior to the Long
Stop Date, the Joint Share Exchange Agreement will automatically terminate at midnight on the day immediately following the Long
Stop Date.
Termination and Events of Default
Termination of Joint Share Exchange Agreement
The Joint Share Exchange Agreement may
be terminated prior to the Effective Time by either ASE or SPIL if any of the following occurs:
|
·
|
a law, judgment, court order or administrative decision issued by a competent authority restricts or prohibits the consummation
of the Share Exchange, and such restriction or prohibition has been confirmed and cannot be remedied by amending the Joint Share
Exchange Agreement; or
|
|
·
|
the Joint Share Exchange Agreement and Share Exchange are not approved by ASE’s shareholders or SPIL’s shareholders
at their respective shareholder meetings.
|
The Joint Share Exchange Agreement may
also be terminated at any time prior to the Effective Time by ASE if SPIL has breached or failed to perform any of its representations,
warranties, undertakings or obligations under the Joint Share Exchange Agreement and such breach leads to the failure to satisfy
the conditions to the consummation and is by its nature not capable of being cured, or is not cured by SPIL within 30 business
days of receiving written notice of such breach, and is not waived in writing by ASE.
The Joint Share Exchange Agreement may
also be terminated at any time prior to the Effective Time by SPIL if ASE has breached or failed to perform any of its representations,
warranties, undertakings or obligations under the Joint Share Exchange Agreement and such breach leads to the failure to satisfy
the conditions to the consummation and is by its nature not capable of being cured, or is not cured by ASE within 30 business days
of receiving written notice of such breach, and is not waived in writing by SPIL.
If the Share Exchange is not consummated
on or before the Long Stop Date, the Joint Share Exchange Agreement will automatically terminate at midnight on the day immediately
following the Long Stop Date.
Events of Default and Consequences of
Termination
An event of default will occur if ASE,
HoldCo or SPIL breach any of their obligations, undertakings, representations or warranties under the Joint Share Exchange Agreement,
and such breach is by its nature not capable of being cured or, if such breach is by its nature capable of being cured, the non-defaulting
party requests that the defaulting party cure such breach within 15 days and such breach is not cured within 15 days; provided
that
HoldCo
and ASE are jointly and severally liable for breaches committed by either party, and a breach of any representation or warranty
made prior to the Effective Time will no longer constitute an event of default as of the Effective Time.
Upon the occurrence of an event of default
that prevents the consummation of the Share Exchange on or prior to the Long Stop Date, the non-defaulting Party will be entitled
to terminate the Joint Share Exchange Agreement and claim from the defaulting party all necessary expenses incurred in connection
with entering into the Joint Share Exchange Agreement and the performance of the obligations thereunder, in addition to any rights,
remedies and damages under applicable law, subject to any adjustments for the contributory negligence of the non-defaulting party.
The percentage of such contributory negligence may be determined by an expert appraiser appointed by both ASE and SPIL without
being determined by arbitration. In addition to any right of termination and claims for expenses, upon the occurrence of certain
prescribed material events of default, the non-defaulting party will also be entitled to liquidated damages in the amount of NT$8.5
billion from the defaulting party, subject to adjustments for contributory negligence by the non-defaulting party.
Post-Termination Obligations
Unless ASE terminates the Joint Share Exchange
Agreement for breach by SPIL, ASE has agreed to comply with the ASE Surviving Covenants and SPIL has agreed to be bound by the
provisions relating to a Superior Proposal, and the payment of the break fee, in each case for six (6) months from the date of
termination of the Joint Share Exchange Agreement. In addition, ASE has agreed to maintain its position as solely a financial investor
in SPIL without intervening with SPIL’s independent operations during such six (6) month period.
Post-Closing Operation and Corporate Governance
Board and Management of HoldCo
The directors of HoldCo will be comprised
of nine to thirteen non-independent directors, appointed at a meeting of HoldCo’s incorporators, and three supervisors, who
will be future independent directors. The Chairman of SPIL and President of SPIL will each be appointed (non-independent) directors
of HoldCo. ASE and SPIL will jointly nominate one independent director, when HoldCo appoints independent directors.
Independence
ASE and SPIL have agreed to comply with
certain post-closing covenants to ensure the continued independence of SPIL following the consummation of the Share Exchange, including
that SPIL will become a wholly owned subsidiary of HoldCo but its independent operations and the competition between ASE and SPIL
will be maintained. In addition, subject to applicable law, the duties of SPIL’s directors and the interests of HoldCo, HoldCo
agrees to comply with the following covenants:
|
·
|
the operations of SPIL will be run by the SPIL Board, who will maintain control over SPIL’s organizational documents,
personnel, payroll or welfare systems, financial budgets, audit, technology research and development, operations and marketing;
and other matters, in each case so as to maintain the independence of SPIL’s operations;
|
|
·
|
any matter relating to SPIL’s rights and obligations will be controlled by the SPIL Board or under its authorization,
and the operation of SPIL’s businesses will be conducted by the SPIL Board or under its direction;
|
|
·
|
HoldCo will, to the extent that it is capable, provide guaranties, funding or other support sufficient to enable SPIL to obtain
financing from third parties (including, but not limited to, guarantee documentation acceptable to financing parties), in order
to meet SPIL’s funding needs, including but not limited to capital expenditure and working capital;
|
|
·
|
SPIL’s management, employees, current organizational structure, compensation and relevant benefits as of the date of
execution of the Joint Share Exchange Agreement will be maintained;
|
|
·
|
for so long as SPIL is a subsidiary of HoldCo, the SPIL Board will nominate and appoint directors and supervisors of SPIL in
its sole discretion (and HoldCo will appoint such candidates), and such directors will
|
not
be replaced or otherwise removed without the consent of the SPIL Board; and the compensation and benefits of SPIL’s directors
as of the date of execution of the Joint Share Exchange Agreement will be maintained; and
|
·
|
HoldCo may not dispose of any shares in SPIL without SPIL’s consent.
|
Based on the principle of reciprocity,
SPIL will, to the extent that it is capable, provide guaranties, funding or other support sufficient to enable HoldCo to obtain
financing from third parties (including, but not limited to, guarantee documentation acceptable to financing parties), in order
to meet HoldCo’s funding needs, including but not limited to capital expenditure and working capital.
ASE, HoldCo and SPIL have agreed that,
following the Effective Time, none of ASE, SPIL or any of the other wholly owned subsidiaries of HoldCo, or any of their directors,
managers or agents, without the consent of HoldCo, will offer, agree or enter into any agreement with any third party regarding
an Alternate Transaction.
In addition, HoldCo and its subsidiaries
(other than ASE and SPIL) will not provide ASE with customer details or competitively sensitive information obtained from SPIL,
including but not limited to production and sales costs, product price/quantity and details of suppliers, without the consent of
SPIL and in accordance with applicable antitrust laws.
SPIL has the right to initiate arbitration
against HoldCo or its subsidiaries if ASE commits an event of default under the Joint Share Exchange Agreement.
Employee Benefits and Rights
HoldCo has agreed that, for all employees
of SPIL as of the Effective Time, HoldCo will ensure that, subject to certain exceptions set forth in the Joint Share Exchange
Agreement, they continue to receive existing employee benefits, work under the conditions and be subject to the same personnel
regulations. The employment rights for employees of SPIL will be protected, except where such employee committed a material breach
of applicable law or the personnel regulations of SPIL.
In addition, HoldCo will reserve a portion
of HoldCo’s employee stock options for SPIL’s management and employees. HoldCo will determine the plan and terms for
the issue of employee stock options and the proportion to be reserved for employees of SPIL based on the number of employees; each
employee’s contribution and performance results, and the profitability of HoldCo’s future subsidiaries. SPIL will determine,
in accordance with its personnel regulations, the proportion of such HoldCo’s employee stock options to be distributed to
SPIL’s management and its other employees.
ASE and HoldCo have agreed that SPIL’s
management team may, in its sole discretion and within three months after the completion of the Share Exchange, implement reasonable
and appropriate one-off plans to retain members of SPIL’s management and/or determine whether or not to accept resignations
from SPIL employees who choose to resign after the Effective Time and the terms of such resignations; provided that the SPIL management
team does not violate its duty of loyalty or duty of care.
Expenses
Except as otherwise explicitly provided
for in the Joint Share Exchange Agreement, all costs and expenses incurred by the parties in connection with the Share Exchange
will be paid by the party incurring such costs and expenses.
Governing Law and Jurisdiction
The Joint Share Exchange Agreement is governed
by and is to be construed, in all respects, with the law of ROC, including as to interpretation, effectiveness and performance.
The parties have agreed to submit disputes arising out of the Joint Share Exchange Agreement to the Chinese Arbitration Association
in Taipei.
Description
of HoldCo Common Shares
The following information relates to
the shares of HoldCo Common Shares, including summaries of certain provisions of HoldCo’s Articles of Incorporation and
of the ROC Company Law.
General
The authorized share capital of HoldCo
will be as provided in its Articles of Incorporation, of which such number of shares as to be determined will be issued.
Dividends
In general, HoldCo will not be permitted
to distribute dividends or make other distributions to shareholders in any year in which it did not record net income or retained
earnings (excluding reserves). The ROC Company Law also requires that 10% of annual net income (less prior years’ losses,
if any) be set aside as a legal reserve until the accumulated legal reserve equals our paid-in capital. In addition, the Articles
of Incorporation of HoldCo, if adopted at the ASE EGM to vote for the Share Exchange and other transactions contemplated by the
Joint Share Exchange Agreement, will provide that if HoldCo is profitable, 0.1% (inclusive) to 1% (inclusive) of the profits shall
be allocated as compensation to employees and 0.75% (inclusive) or less of the profits should be allocated as compensation to
directors; however, provided that HoldCo has accumulated losses, the profit shall be set aside to compensate losses before such
allocation. The Articles of Incorporation of HoldCo further provide that the annual net income shall be distributed in the order
of sequences below:
|
·
|
making up for losses, if any;
|
|
·
|
10% being set aside as legal reserve;
|
|
·
|
allocation or reversal of a special surplus reserve in accordance with laws or regulations set forth by the authorities concerned;
and
|
|
·
|
addition or deduction of the portion of retained earnings that are equity investment gains or losses that have been realized
and measured at fair value through other overall gains or losses.
|
At the ASE EGM, the board of directors
of HoldCo will submit to the shareholders for their approval any proposal for the distribution of dividends or the making of any
other distribution to shareholders from HoldCo’ net income for the preceding fiscal year. All common shares outstanding and
fully paid as of the relevant record date are entitled to share equally in any dividend or other distribution so approved. Dividends
may be distributed in cash, in the form of common shares or a combination of the two, as determined by the shareholders at the
meeting. The Articles of Incorporation of HoldCo, if adopted at the ASE EGM to vote for the Share Exchange and other transactions
contemplated by the Joint Share Exchange Agreement, will provide that cash dividend distribution should not be lower than 30% of
the total dividend amount and the remainder be distributed as stock dividends.
HoldCo will also be permitted to make distributions
to its shareholders in cash or in the form of common shares from reserves if it has no accumulated loss. However, the distribution
payable out of HoldCo’ legal reserve can only come from the amount exceeding 25% of the total paid-in capital.
Changes in Share Capital
Under ROC Company Law, any change in the
authorized share capital of a company limited by shares requires an amendment to its Articles of Incorporation, which in turn requires
approval at the shareholders’ meeting. In the case of a public company such as HoldCo, it must also obtain the approval of,
or submit a report to, the FSC and the Kaohsiung Export Processing Zone Administration. Authorized but unissued common shares may
be issued, subject to applicable ROC law, upon terms as the board of directors of HoldCo may determine.
Preemptive Rights
Under the ROC Company Law, when an ROC
company issues new shares for cash, existing shareholders who are listed on the shareholders’ register as of the record date
have preemptive rights to subscribe for the new issue in proportion to their existing shareholdings, while a company’s employees,
whether or not they are shareholders of the
company,
have rights to subscribe for 10% to 15% of the new issue. Any new shares that remain unsubscribed at the expiration of the subscription
period may be freely offered, subject to compliance with applicable ROC law.
In addition, in accordance with the ROC
Securities and Exchange Law, a public company that intends to offer new shares for cash must offer to the public at least 10% of
the shares to be sold, except under certain circumstances or when exempted by the FSC. This percentage can be increased by a resolution
passed at a shareholders’ meeting, which would diminish the number of new shares subject to the preemptive rights of existing
shareholders.
These preemptive rights provisions do not
apply to offerings of new shares through a private placement approved at a shareholders’ meeting.
Meetings of Shareholders
HoldCo will be required to hold an annual
general meeting of our shareholders within six months following the end of each fiscal year. These meetings are generally held
in Kaohsiung, Taiwan. Any shareholder who holds 1% or more of HoldCo’ issued shares may submit one written proposal for discussion
at our annual general meeting. Extraordinary shareholders’ meetings may be convened by resolution of the board of directors
or by the board of directors upon the written request of any shareholder or shareholders who have held 3% or more of the outstanding
common shares for a period of one year or longer. Shareholders’ meetings may also be convened by a supervisor. Notice in
writing of meetings of shareholders, stating the place, time and purpose, must be dispatched to each shareholder at least 30 days,
in the case of annual general meetings, and 15 days, in the case of extraordinary meetings, before the date set for each meeting.
A majority of the holders of all issued common shares present at a shareholders’ meeting constitutes a quorum for meetings
of shareholders.
Voting Rights
Under the ROC Company Law, except under
limited circumstances, shareholders have one vote for each common share held. Under the ROC Company Law, our directors and supervisors
are elected at a shareholders’ meeting through cumulative voting.
In general, a resolution can be adopted
by the holders of at least a majority of our common shares represented at a shareholders’ meeting at which the holders of
a majority of all issued common shares are present. Under ROC Company Law, the approval by at least a majority of HoldCo Common
Shares represented at a shareholders’ meeting in which a quorum of at least two-thirds of all issued common shares are represented
is required for major corporate actions (alternatively, ROC Company Law provides that in case of a public company, such as HoldCo,
a resolution to approve such major corporate actions may be adopted by the holders of at least two-thirds of the shares represented
at a meeting of shareholders at which holders of at least a majority of issued and outstanding shares are present), including:
|
·
|
amendment to the Articles of Incorporation, including increase of authorized share capital and any changes of the rights of
different classes of shares;
|
|
·
|
execution, amendment or termination of any contract through which the company leases its entire business to others, or the
company appoints others to operate its business or the company operates its business with others on a continuous basis;
|
|
·
|
transfer of entire business or assets or a substantial part of its business or assets;
|
|
·
|
acquisition of the entire business or assets of any other company, which would have a significant impact on the company’s
operations;
|
|
·
|
distribution of any stock dividend;
|
|
·
|
dissolution, merger or spin-off of the company;
|
|
·
|
issuance of restricted shares to employees; and
|
|
·
|
removal of the directors or supervisors.
|
A shareholder may be represented at an
annual general or extraordinary meeting by proxy if a valid proxy form is delivered to HoldCo five days before the commencement
of the annual general or extraordinary shareholders’ meeting. Shareholders may exercise their voting rights by way of electronic
means if the voting is made on the website maintained by the Taiwan Depository & Clearing Corporation (
http://www.stockvote.com.tw
)
in accordance with the instructions provided therein.
Holders of HoldCo ADSs do not have the
right to exercise voting rights with respect to the underlying common shares, except as described in the deposit agreement.
Other Rights of Shareholders
Under the ROC Company Law, dissenting shareholders
are entitled to appraisal rights in certain major corporate actions such as a proposed amalgamation by the company. If agreement
with the company cannot be reached, dissenting shareholders may seek a court order for the company to redeem all of their shares.
Shareholders may exercise their appraisal rights by serving written notice on the company prior to or at the related shareholders’
meeting and/or by raising and registering an objection at the shareholders’ meeting (see “Special Factors — Rights
of Dissenting Shareholders”). In addition to appraisal rights, shareholders have the right to sue for the annulment of any
resolution adopted at a shareholders’ meeting where the procedures were legally defective within 30 days after the date of
the shareholders’ meeting. One or more shareholders who have held 3% or more of the issued and outstanding shares of a company
for a period of one year or longer may require a supervisor or an independent director (in the event a company’s supervisors
are replaced by an audit committee as required by ROC Company Law) to bring a derivative action on behalf of the company against
a director as a result of the director’s unlawful actions or failure to act.
Rights of Holders of Deposited Securities
For rights of holders of deposited securities,
please see “Description of HoldCo American Depositary Shares —Voting Rights.”
Register of Shareholders and Record Dates
HoldCo’s share registrar, President
Securities Corp., will maintain HoldCo’s register of shareholders at its offices in Kaohsiung, Taiwan. Under the ROC Company
Law and the Articles of Incorporation of HoldCo, HoldCo may, by giving advance public notice, set a record date and close the
register of shareholders for a specified period in order for it to determine the shareholders or pledgees that are entitled to
rights pertaining to its common shares. The specified period required is as follows:
|
·
|
annual general meeting—60 days;
|
|
·
|
extraordinary shareholders’ meeting—30 days; and
|
|
·
|
relevant record date—5 days.
|
Annual Financial Statements
At least ten days before the annual general
meeting, HoldCo’ annual financial statements, which are prepared in conformity with Taiwan IFRS, must be available at our
principal executive office in Kaohsiung, Taiwan for inspection by the shareholders.
Transfer of Common Shares
The transfer of common shares in registered
form is effected by endorsement and delivery of the related share certificates but, in order to assert shareholders’ rights
against HoldCo, the transferee must have his name and address registered on our register of shareholders. Shareholders are required
to file their respective specimen seals, also known as chops, with us. Chops are official stamps widely used in Taiwan by individuals
and other entities to authenticate the execution of official and commercial documents. The settlement of trading in our common
shares is normally carried out on the book-entry system maintained by the Taiwan Depository & Clearing Corporation.
Acquisition of Common Shares by HoldCo
Under the ROC Securities and Exchange Law,
HoldCo may purchase its own common shares for treasury stock in limited circumstances, including:
|
·
|
to transfer shares to HoldCo’ employees;
|
|
·
|
to deliver shares upon the conversion or exercise of bonds with warrants, preferred shares with warrants, convertible bonds,
convertible preferred shares or warrants issued by HoldCo; and
|
|
·
|
to maintain
HoldCo’s credit and shareholders’ equity, provided that the shares so purchased
shall be canceled.
|
HoldCo may purchase its common shares on
the TWSE or by means of a public tender offer. These transactions require the approval of a majority of SPIL Board of directors
at a meeting in which at least two-thirds of the directors are in attendance. The total amount of common shares purchased for treasury
stock may not exceed 10.0% of the total issued shares. In addition, the total cost of the purchased shares shall not exceed the
aggregate amount of our retained earnings, any premium from share issuances and the realized portion of HoldCo’ capital reserve.
HoldCo may not pledge or hypothecate any
of our shares purchased by us. In addition, it may not exercise any shareholders’ right attaching to such shares. In the
event that HoldCo purchases its shares on the TWSE, its affiliates, directors, supervisors, managers, and their respective spouses
and minor children and/or nominees are prohibited from selling any of HoldCo’ shares during the period in which HoldCo is
purchasing our shares.
Pursuant to the ROC Company Law, an entity
in which HoldCo directly or indirectly owns more than 50.0% of the voting shares or paid-in capital, which is referred to as a
controlled entity, may not purchase our shares. Also, if our company and a controlled entity jointly own, directly or indirectly,
more than 50.0% of the voting shares or paid-in capital of another entity, which is referred to as a third entity, the third entity
may not purchase shares in either our company or a controlled entity.
Liquidation Rights
In the event of our liquidation, the assets
remaining after payment of all debts, liquidation expenses and taxes will be distributed pro rata to the shareholders in accordance
with the relevant provisions of the ROC Company Law and our Articles of Incorporation.
Transfer Restrictions
Substantial Shareholders
The ROC Securities and Exchange Law currently
requires:
|
·
|
each director, supervisor, manager, or substantial shareholder (that is, a shareholder who holds more than 10.0% shares of
a company), and their respective spouses, minor children or nominees, to report any change in that person’s shareholding
to the issuer of the shares and the FSC; and
|
|
·
|
each director, supervisor, manager, or substantial shareholder, and their respective spouses, minor children or nominees, after
acquiring the status of director, supervisor, manager, or substantial shareholder for a period of six months, to report his or
her intent to transfer any shares on the TWSE to the FSC at least three days before the intended transfer, unless the number of
shares to be transferred does not exceed 10,000 shares.
|
In addition, the number of shares that
can be sold or transferred on the TWSE by any person subject to the restrictions described above on any given day may not exceed:
|
·
|
0.2% of the outstanding shares of the company in the case of a company with no more than 30 million outstanding shares; or
|
|
·
|
0.2% of 30 million shares plus 0.1% of the outstanding shares exceeding 30 million shares in the case of a company with more
than 30 million outstanding shares; or
|
|
·
|
in any case, 5.0% of the average trading volume (number of shares) on the TWSE for the ten consecutive trading days preceding
the reporting day on which the director, supervisor, manager or substantial shareholder reports the intended share transfer to
the FSC.
|
These restrictions do not apply to sales
or transfers of HoldCo ADSs.
Description
of HoldCo American Depositary Shares
Citibank, N.A. has agreed to act as
the depositary bank for the HoldCo American Depositary Shares. Citibank when acting as depositary bank for the HoldCo American
Depositary Shares is referred to as the “depositary bank” or as the “HoldCo Depositary.” Citibank’s
depositary offices are located at 388 Greenwich Street, New York, New York 10013. The HoldCo American Depositary Shares are referred
to as “ADSs” or “HoldCo ADSs” and represent ownership interests in securities that are on deposit with
the HoldCo Depositary. The HoldCo ADSs may be represented by certificates that are commonly known as “American Depositary
Receipts” or “ADRs.” The depositary bank typically appoints a custodian to safe keep the securities on deposit.
In this case, the custodian is Citibank Taiwan Ltd., located at 9F, No. 16 Nanking East Road, Section 4, Taipei 10553, Taiwan,
ROC.
HoldCo will appoint Citibank as depositary
bank pursuant to a deposit agreement (the “HoldCo Deposit Agreement”). A copy of the HoldCo Deposit Agreement is on
file with the SEC under cover of a Registration Statement on Form F-6 (Reg No.333-214753). You may obtain a copy of the HoldCo
Deposit Agreement from the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549 and from the SEC’s
website (www.sec.gov).
The following is a summary description
of the material terms of HoldCo ADSs and of your material rights as an owner of HoldCo ADSs. Please remember that summaries by
their nature lack the precision of the information summarized and that the rights and obligations of an owner of HoldCo ADSs will
be determined by reference to the terms of the HoldCo Deposit Agreement and not by this summary. We urge you to review the HoldCo
Deposit Agreement in its entirety. The portions of this summary description that are italicized describe matters that may be relevant
to the ownership of HoldCo ADSs but that may not be contained in the HoldCo Deposit Agreement.
Each HoldCo ADS represents the right to
receive, and to exercise the beneficial ownership interests in, two HoldCo Common Shares that are on deposit with the HoldCo Depositary
and/or custodian. An ADS also represents the right to receive, and to exercise the beneficial interests in, any other property
received by the HoldCo Depositary or the custodian on behalf of the owner of the ADS but that has not been distributed to the owners
of HoldCo ADSs because of legal restrictions or practical considerations. The custodian, the HoldCo Depositary and their respective
nominees will hold all deposited property for the benefit of the holders and beneficial owners of HoldCo ADSs. The deposited property
does not constitute the proprietary assets of the HoldCo Depositary, the custodian or their nominees. Beneficial ownership in the
deposited property will under the terms of the HoldCo Deposit Agreement be vested in the beneficial owners of the HoldCo ADSs.
The HoldCo Depositary, the custodian and their respective nominees will be the record holders of the deposited property represented
by the HoldCo ADSs for the benefit of the holders and beneficial owners of the corresponding HoldCo ADSs. A beneficial owner of
HoldCo ADSs may or may not be the holder of HoldCo ADSs. Beneficial owners of HoldCo ADSs will be able to receive, and to exercise
beneficial ownership interests in, the deposited property only through the registered holders of the HoldCo ADSs, the registered
holders of the HoldCo ADSs (on behalf of the applicable ADS owners) only through the HoldCo Depositary, and the HoldCo Depositary
(on behalf of the owners of the corresponding HoldCo ADSs) directly, or indirectly, through the custodian or their respective nominees,
in each case upon the terms of the HoldCo Deposit Agreement.
If you become an owner of HoldCo ADSs,
you will become a party to the HoldCo Deposit Agreement and therefore will be bound to its terms and to the terms of any HoldCo
American Depositary Receipt (“HoldCo ADR”) that evidences your HoldCo ADSs. The HoldCo Deposit Agreement and the HoldCo
ADR specify the rights and obligations of HoldCo as well as your rights and obligations as owner of HoldCo ADSs and those of the
HoldCo Depositary. As an ADS holder you appoint the HoldCo Depositary to act on your behalf in certain circumstances. The HoldCo
Deposit Agreement and the HoldCo ADRs are governed by New York law. However, the obligations of HoldCo to the holders of common
shares will continue to be governed by ROC laws, which may be different from the laws in the United States. In addition, we note
that ROC law and regulations may restrict the deposit and withdrawal of the common shares into or from the depositary receipt facilities.
Under the laws and regulations of the
ROC, as currently in effect, after the Initial Deposit (as defined below), without obtaining regulatory approval from the FSC,
no common shares may be accepted for deposit and no HoldCo ADSs may be issued under the terms of the HoldCo Deposit Agreement except
in the following circumstances:
|
(1)
|
upon a stock dividend on, or a free distribution of, shares to existing shareholders;
|
|
(2)
|
upon the exercise by existing shareholders of their preemptive
rights in connection with capital increases for cash;
|
|
(3)
|
subject in each case to receipt of all applicable approvals in the ROC, the issuance of shares by us to holders of bonds in
connection with the exercise of conversion rights of such bond holders; and
|
|
(4)
|
as permitted under the HoldCo Deposit Agreement, the purchase directly by a person or through the depositary of shares on the
TWSE or the delivery by any person of shares held by such person for deposit in the depositary receipt facility provided that the
total number of HoldCo ADSs outstanding after an issuance described in clause (4) does not exceed the number of HoldCo ADSs issued
and previously approved by the ROC FSC in connection with the offering plus any HoldCo ADSs created under clauses (1), (2) and
(3) described above.
|
Under the laws and regulations of the ROC,
the shares deposited under the HoldCo Deposit Agreement may be withdrawn upon cancellation of the corresponding HoldCo ADSs pursuant
to the HoldCo Deposit Agreement subject to the following conditions:
|
·
|
the appointment of an eligible agent in the ROC to open (1) a securities trading account with an ROC brokerage firm with ROC
approval and (2) a bank account to pay ROC taxes, remit funds, exercise shareholders’ rights and perform such other functions
as you may designate upon such withdrawal;
|
|
·
|
the appointment of a tax guarantor in the ROC; and
|
|
·
|
the appointment of a custodian bank to hold the securities in safekeeping, make confirmations, settle trades and report relevant
information.
|
In addition, you will be required to register
with the TWSE for making investments in the ROC securities market and obtain a foreign investor investment identification prior
to withdrawing common shares.
As an owner of HoldCo ADSs, you may hold
your HoldCo ADSs by means of a HoldCo ADR registered in your name, or through a brokerage or safekeeping account, or through an
account established by the HoldCo Depositary in your name reflecting the registration of uncertificated HoldCo ADSs directly on
the books of the HoldCo Depositary (commonly referred to as the “direct registration system” or “DRS”).
The direct registration system reflects the uncertificated (book-entry) registration of ownership of HoldCo ADSs by the HoldCo
Depositary. Under the direct registration system, ownership of HoldCo ADSs is evidenced by periodic statements issued by the HoldCo
Depositary to the holders of the HoldCo ADSs. The direct registration system includes automated transfers between the HoldCo Depositary
and DTC, the central book-entry clearing and settlement system for equity securities in the United States. If you decide to hold
your HoldCo ADSs through your brokerage or safekeeping account, you must rely on the procedures of your broker or bank to assert
your rights as ADS owner. Banks and brokers typically hold securities such as the HoldCo ADSs through clearing and settlement systems
such as DTC. The procedures of such clearing and settlement systems may limit your ability to exercise your rights as an owner
of HoldCo ADSs. Please consult with your broker or bank if you have any questions concerning these limitations and procedures.
All HoldCo ADSs held through DTC will be registered in the name of a nominee of DTC. This summary description assumes you have
opted to own the HoldCo ADSs directly by means of a HoldCo ADS registered in your name and, as such, we will refer to you as the
“holder.” When we refer to “you,” we assume the reader owns HoldCo ADSs and will own HoldCo ADSs at the
relevant time.
The registration of the common shares in
the name of the HoldCo Depositary or the custodian shall, to the maximum extent permitted by applicable law, vest in the HoldCo
Depositary or the custodian the record ownership in the applicable common shares with the beneficial ownership rights and interests
in such common shares being at all times vested with the beneficial owners of the HoldCo ADSs representing the common shares. The
HoldCo Depositary or the custodian shall at all times be entitled to exercise the beneficial ownership rights in all deposited
property, in each case only on behalf of the holders and beneficial owners of the HoldCo ADSs representing the deposited property.
Dividends and Distributions
As a holder of HoldCo ADSs, you generally
have the right to receive the distributions we make on the securities deposited with the custodian. Your receipt of these distributions
may be limited, however, by practical considerations and legal limitations. Holders of HoldCo ADSs will receive such distributions
under the terms of the HoldCo Deposit Agreement in proportion to the number of HoldCo ADSs held as of the specified record date,
after deduction the applicable fees, taxes and expenses.
Distributions of Cash
Whenever HoldCo makes a cash distribution
for the securities on deposit with the custodian, it will deposit the funds with the custodian. Upon receipt of confirmation of
the deposit of the requisite funds, the HoldCo Depositary will arrange for the funds to be converted into U.S. dollars and for
the distribution of the U.S. dollars to the holders, subject to ROC law and regulations.
The conversion into U.S. dollars will take
place only if practicable and if the U.S. dollars are transferable to the United States. The HoldCo Depositary will apply the same
method for distributing the proceeds of the sale of any property (such as undistributed rights) held by the custodian in respect
of securities on deposit.
The distribution of cash will be made net
of the fees, expenses, taxes and governmental charges payable by holders under the terms of the HoldCo Deposit Agreement. The HoldCo
Depositary will hold any cash amounts it is unable to distribute in a non-interest bearing account for the benefit of the applicable
holders and beneficial owners of HoldCo ADSs until the distribution can be effected or the funds that the HoldCo Depositary holds
must be escheated as unclaimed property in accordance with the laws of the relevant states of the United States.
Distributions of Shares
Whenever HoldCo makes a free distribution
of common shares for the securities on deposit with the custodian, we will deposit the applicable number of common shares with
the custodian. Upon receipt of confirmation of such deposit, the HoldCo Depositary will either distribute to holders new HoldCo
ADSs representing the common shares deposited or modify the HoldCo ADS-to-common shares ratio, in which case each HoldCo ADS you
hold will represent rights and interests in the additional common shares so deposited. Only whole new HoldCo ADSs will be distributed.
Fractional entitlements will be sold and the proceeds of such sale will be distributed as in the case of a cash distribution.
The distribution of new HoldCo ADSs or
the modification of the HoldCo ADS-to-common share ratio upon a distribution of common shares will be made net of the fees, expenses,
taxes and governmental charges payable by holders under the terms of the HoldCo Deposit Agreement. In order to pay such taxes or
governmental charges, the HoldCo Depositary may sell all or a portion of the new common shares so distributed.
No such distribution of new HoldCo ADSs
will be made if it would violate a law (
i.e.
, the U.S. securities laws) or if it is not operationally practicable. If the
HoldCo Depositary does not distribute new HoldCo ADSs as described above, it may sell the common shares received upon the terms
described in the HoldCo Deposit Agreement and will distribute the proceeds of the sale as in the case of a distribution of cash.
Distributions of Rights
Whenever HoldCo intends to distribute rights
to purchase additional common shares, we will give prior notice to the HoldCo Depositary and we will assist the HoldCo Depositary
in determining whether it is lawful and reasonably practicable to distribute rights to purchase additional HoldCo ADSs to holders.
The HoldCo Depositary will establish procedures
to distribute rights to purchase additional HoldCo ADSs to holders and to enable such holders to exercise such rights if it is
lawful and reasonably practicable to make the rights available to holders of HoldCo ADSs, and if we provide all of the documentation
contemplated in the HoldCo Deposit Agreement (such as opinions to address the lawfulness of the transaction). You may have to pay
fees, expenses, taxes and other governmental charges to subscribe for the new HoldCo ADSs upon the exercise of your rights. The
HoldCo Depositary is not obligated to establish procedures to facilitate the distribution and exercise by holders of rights to
purchase new common shares other than in the form of HoldCo ADSs.
The HoldCo Depositary will
not
distribute
the rights to you if:
|
·
|
HoldCo does not timely request that the rights be distributed to you or we request that the rights not be distributed to you;
or
|
|
·
|
HoldCo fails to deliver satisfactory documents to the HoldCo Depositary; or
|
|
·
|
It is not reasonably practicable to distribute the rights.
|
The HoldCo Depositary will sell the rights
that are not exercised or not distributed if such sale is lawful and reasonably practicable. The proceeds of such sale will be
distributed to holders as in the case of a cash distribution. If the HoldCo Depositary is unable to sell the rights, it will allow
the rights to lapse.
Elective Distributions
Whenever HoldCo intends to distribute a
dividend payable at the election of shareholders either in cash or in additional shares, it will give prior notice thereof to the
HoldCo Depositary and will indicate whether we wish the elective distribution to be made available to you. In such case, we will
assist the HoldCo Depositary in determining whether such distribution is lawful and reasonably practicable.
The HoldCo Depositary will make the election
available to you only if it is reasonably practicable and if we have provided all of the documentation contemplated in the HoldCo
Deposit Agreement. In such case, the HoldCo Depositary will establish procedures to enable you to elect to receive either cash
or additional HoldCo ADSs, in each case as described in the HoldCo Deposit Agreement.
If the election is not made available to
you, you will receive either cash or additional HoldCo ADSs, depending on what a shareholder in the ROC would receive upon failing
to make an election, as more fully described in the HoldCo Deposit Agreement.
Other Distributions
Whenever HoldCo intends to distribute property
other than cash, common shares or rights to purchase additional common shares, it will notify the HoldCo Depositary in advance
and will indicate whether we wish such distribution to be made to you. If so, HoldCo will assist the HoldCo Depositary in determining
whether such distribution to holders is lawful and reasonably practicable.
If it is reasonably practicable to distribute
such property to you and if HoldCo provides all of the documentation contemplated in the HoldCo Deposit Agreement, the HoldCo Depositary
will distribute the property to the holders in a manner it deems practicable.
The distribution will be made net of fees,
expenses, taxes and governmental charges payable by holders under the terms of the HoldCo Deposit Agreement. In order to pay such
taxes and governmental charges, the HoldCo Depositary may sell all or a portion of the property received.
The HoldCo Depositary will
not
distribute
the property to you and will sell the property if:
|
·
|
HoldCo does not request that the property be distributed to you or if we ask that the property not be distributed to you; or
|
|
·
|
HoldCo does not deliver satisfactory documents to the HoldCo Depositary; or
|
|
·
|
The HoldCo Depositary determines that all or a portion of the distribution to you is not reasonably practicable.
|
The proceeds of such a sale will be distributed
to holders as in the case of a cash distribution.
Redemption
Whenever HoldCo decides to redeem any of
the securities on deposit with the custodian, it will notify the HoldCo Depositary in advance. If it is practicable and if HoldCo
provides all of the documentation contemplated in the HoldCo Deposit Agreement, the HoldCo Depositary will provide notice of the
redemption to the holders.
The custodian will be instructed to surrender
the shares being redeemed against payment of the applicable redemption price. The HoldCo Depositary will convert the redemption
funds received into U.S. dollars upon the terms of the HoldCo Deposit Agreement and will establish procedures to enable holders
to receive the net proceeds from the redemption upon surrender of their HoldCo ADSs to the HoldCo Depositary. You may have to pay
fees, expenses, taxes and other governmental charges upon the redemption of your HoldCo ADSs. If less than all HoldCo ADSs are
being redeemed, the HoldCo ADSs to be retired will be selected by lot or on a pro rata basis, as the HoldCo Depositary may determine.
Changes Affecting Common Shares
The common shares of HoldCo held on deposit
for your HoldCo ADSs may change from time to time. For example, there may be a change in nominal or par value, split-up, cancellation,
consolidation or any other reclassification of such common shares or a recapitalization, reorganization, merger, consolidation
or sale of assets of HoldCo.
If any such change were to occur, your
HoldCo ADSs would, to the extent permitted by law, represent the right to receive the property received or exchanged in respect
of the common shares held on deposit. The HoldCo Depositary may in such circumstances deliver new HoldCo ADSs to you, amend the
HoldCo Deposit Agreement, the HoldCo ADRs and the applicable Registration Statement(s) on Form F-6, call for the exchange of your
existing HoldCo ADSs for new HoldCo ADSs and take any other actions that are appropriate to reflect as to the HoldCo ADSs the change
affecting the common shares of HoldCo. If the HoldCo Depositary may not lawfully distribute such property to you, the HoldCo Depositary
may sell such property and distribute the net proceeds to you as in the case of a cash distribution.
Issuance of HoldCo ADSs upon Deposit of Common Shares
The initial deposit of shares by HoldCo
in connection with this Share Exchange will be made by the delivery to the custodian of common shares of HoldCo in book-entry form,
which shares will be registered in the name of the depositary or its nominee, as representatives of the holders of the HoldCo ADSs.
Any future deposits of new shares for cash by HoldCo in connection with any new HoldCo ADS offering will be made by the delivery
to the custodian of a Certificate of Payment evidencing the right to receive the underlying common shares of HoldCo in book-entry
form, which shares will be registered in the name of the depositary or its nominee, as representatives of the holders of the HoldCo
ADSs, until the underlying common shares initially evidenced by scripless certificates of payment in the form of a master certificate
of payment are listed on the TWSE. In practice, no later than the second ROC business day following the closing day of any new
future HoldCo ADSs offering (the “Closing Date”), we will apply to the TWSE for listing of the Individual Scripless
Certificate of Payment. Generally, the TWSE will approve the listing of the Individual Scripless Certificates of Payment on the
fifth ROC business day following the Closing Date. Immediately upon such listing, the Certificate of Payment we deliver to the
depositary’s custodian on the Closing Date will be replaced by the Individual Scripless Certificates of Payment. The initial
deposit of shares by HoldCo in connection with the Share Exchange are collectively referred to herein as the "Initial Deposit.”
Under the ROC Securities and Exchange
Law and applicable regulations, we are required to deliver the underlying shares in physical certificate form or scripless form
to the custodian within thirty days after receiving approval from the relevant governmental authority of our corporate amendment
registration. We are required under the ROC Company Law to file an amendment to our corporate registration within fifteen days
after receiving the proceeds from any new offerings of HoldCo ADSs. Prior to the issue of the underlying shares in physical certificate
form or scripless form, we will apply for and obtain approval to list the underlying shares on the TWSE. Until the underlying shares
have been so issued and delivered, the HoldCo ADSs will represent shares evidenced by the Certificate of Payment (from the Closing
Date to the date immediately prior to the listing of the Individual Scripless Certificates of Payment) or the Individual Scripless
Certificates of Payment on or after the date of listing of the Individual Scripless Certificates of Payment. In case of a withdrawal
of the underlying shares, such holders will be entitled to the same rights as if the depositary were holding the underlying shares
in physical certificate form or
scripless
form. The Individual Scripless Certificates of Payment, which are without physical form and are issued only in book-entry form
through Taiwan Depository & Clearing Corporation, the book-entry settlement system of the ROC, carry the same rights as those
attaching to the shares in respect of dividends and are eligible for trading on the TWSE in the same manner as the shares.
Subject to limitations set forth in the
HoldCo Deposit Agreement, after the Initial Deposit, the depositary may create HoldCo ADSs on your behalf if you or your broker
deposit shares with the custodian. The depositary will deliver these HoldCo ADSs to the person you indicate only after you pay
any applicable issuance fees and any charges and taxes payable for the transfer of the shares to the custodian and you provide
the applicable deposit certification. Your ability to deposit shares and receive HoldCo ADSs may be limited by U.S. and ROC legal
considerations applicable at the time of deposit.
Under current ROC law, after the
Initial Deposit, no deposits of shares may be made in a depositary receipt facility, and no HoldCo ADSs may be issued against
such deposits, without specific approval of the FSC, except in connection with the offering and the issuance of additional HoldCo
ADSs in connection with (i) dividends on, or free distributions of, shares, (ii) the exercise by holders of existing HoldCo ADSs
of their preemptive rights in the event of capital increases for cash, (iii) subject in each case to receipt of all applicable
approvals in the ROC, the issuance of shares by HoldCo to holders of convertible bonds in connection with the exercise of conversion
rights of such bond holders, and (iv) to the extent that previously issued HoldCo ADSs have been canceled, reissuances of HoldCo
ADSs up to an aggregate number of outstanding HoldCo ADSs equal to the total number of HoldCo ADSs (subject to adjustment for
the issuances described in clauses (i), (ii) and (iii)) that were originally approved by the FSC and issued in connection with
the offering; provided that the depositary will refuse to accept common shares for deposit under clause (iv) if such deposit is
not permitted under any restriction notified by the company to the depositary from time to time, which restriction may specify
blackout periods during which deposits may not be made, time periods during which deposits may be made, and minimum size and frequency
of deposits.
The depositary and the custodian will refuse
to accept shares for deposit whenever they are notified in writing that such deposit would result in any violation of applicable
laws, including ownership restrictions under the laws of the ROC. In addition, the depositary will refuse to accept shares for
deposit under clause (iv) of the immediately preceding paragraph if such deposit is not permitted under any restriction notified
by HoldCo to the depositary from time to time, which restriction may specify blackout periods during which deposits may not be
made, time periods during which deposits may be made, and minimum and maximum size and frequency of deposits.
The issuance of HoldCo ADSs may be delayed
until the depositary or the custodian receives confirmation that all required approvals have been given and that the shares have
been duly transferred to the custodian. The depositary will only issue HoldCo ADSs in whole numbers.
When you make a deposit of HoldCo Common
Shares, you will be responsible for transferring good and valid title to the HoldCo Depositary. As such, you will be deemed to
represent and warrant that:
|
·
|
The HoldCo Common Shares are duly authorized, validly issued, fully paid, non-assessable and legally obtained.
|
|
·
|
All preemptive (and similar) rights, if any, with respect to such common shares have been validly waived or exercised.
|
|
·
|
You are duly authorized to deposit HoldCo Common Shares.
|
|
·
|
The HoldCo Common Shares presented for deposit are free and clear of any lien, encumbrance, security interest, charge, mortgage
or adverse claim, and are not, and the HoldCo ADSs issuable upon such deposit will not be, “restricted securities”
(as defined in the HoldCo Deposit Agreement).
|
|
·
|
The common shares presented for deposit have not been stripped of any rights or entitlements.
|
If any of the representations or warranties
are incorrect in any way, we and the HoldCo Depositary may, at your cost and expense, take any and all actions necessary to correct
the consequences of the misrepresentations.
Transfer, Combination and Split Up of HoldCo ADRs
As a HoldCo ADR holder, you will be entitled
to transfer, combine or split up your HoldCo ADRs and the HoldCo ADSs evidenced thereby. For transfers of HoldCo ADRs, you will
have to surrender the HoldCo ADRs to be transferred to the HoldCo Depositary and also must:
|
·
|
ensure that the surrendered HoldCo ADR is properly endorsed or otherwise in proper form for transfer;
|
|
·
|
provide such proof of identity and genuineness of signatures as the HoldCo Depositary deems appropriate;
|
|
·
|
provide any transfer stamps required by the State of New York or the United States; and
|
|
·
|
pay all applicable fees, charges, expenses, taxes and other government charges payable by HoldCo ADR holders pursuant to the
terms of the HoldCo Deposit Agreement, upon the transfer of HoldCo ADRs.
|
To have your HoldCo ADRs either combined
or split up, you must surrender the HoldCo ADRs in question to the HoldCo Depositary with your request to have them combined or
split up, and you must pay all applicable fees, charges and expenses payable by HoldCo ADR holders, pursuant to the terms of the
HoldCo Deposit Agreement, upon a combination or split up of HoldCo ADRs.
Withdrawal of Common Shares Upon Cancellation of HoldCo
ADSs
On or after approximately the fifth
ROC business day from a Closing Date for any future HoldCo ADS offering, with regard to such HoldCo ADSs issued on the Closing
Date, subject to the approval from the TWSE of the listing of the Individual Scripless Certificates of Payment and the relevant
provisions of the HoldCo Deposit Agreement, a holder may apply to withdraw the underlying shares or, as the case may be, the Individual
Scripless Certificates of Payment, or request Citibank, N.A., as Depositary, acting pursuant to the HoldCo Deposit Agreement, to
sell or cause to be sold on behalf of such holders of the underlying shares or, as the case may be, the Individual Scripless Certificates
of Payment. The Individual Scripless Certificates of Payment, which are without physical form and settle through the book-entry
system, carry the same rights as those attaching to the underlying shares in respect of dividends and are eligible for trading
on the TWSE in the same manner as the underlying shares. Your ability to withdraw the shares may be limited by U.S. and ROC law
considerations applicable at the time of withdrawal.
Under current ROC law, if you (other
than PRC persons except for qualified domestic institutional investors in the PRC) wish to withdraw and hold underlying shares
from a depositary receipt facility, you will be required to appoint an eligible agent in the ROC to open a securities trading account
with a local brokerage firm (after receiving an approval from the TWSE) and a bank account (the securities trading account and
the bank account are collectively referred to as “ the Accounts”, to pay ROC taxes, remit funds, exercise shareholders’
rights and perform such other functions as you may designate upon such withdrawal. In addition, you will be required to appoint
a custodian bank to hold the securities in safekeeping, make confirmation and settle trades and report all relevant information.
Without the opening of such Accounts, the withdrawing owner would be unable to hold or subsequently sell the underlying shares
withdrawn from the depositary receipt facility on the TWSE or otherwise. In addition, you will be required to register with the
TWSE for making investments in the ROC securities market prior to withdrawing shares. These laws may change from time to time.
We cannot assure you that current ROC law will remain in effect or that future changes in ROC law will not adversely affect your
ability to withdraw our shares from the HoldCo ADS facility.
Holders of HoldCo ADSs withdrawing shares
represented by HoldCo ADSs are also required under current ROC law and regulations to appoint an agent in the ROC for filing tax
returns and making tax payments. Such agent must meet certain qualifications set by the ROC Financial Supervisory Commission and,
upon appointment, becomes a guarantor of such withdrawing owner’s ROC tax obligations. Evidence of the appointment of such
agent and the approval of such appointment by the ROC tax authorities may be required as conditions to such withdrawing holder’s
repatriation of the proceeds from the sale of the withdrawn shares. There can be no assurance that such withdrawing holder will
be able to appoint and obtain approval for such agent in a timely manner.
Subject to the withdrawal of deposited
property being permitted under ROC law and regulations, you may also request that our shares or Individual Scripless Certificates
of Payment represented by your HoldCo ADSs be sold on your behalf. The depositary may require that you deliver your request for
sale in writing. Any sale of our shares will
be
conducted according to applicable ROC law through a securities company in the ROC on the TWSE or in another manner as is permitted
under applicable ROC law. Any sale will be at your risk and expense. You may also be required to enter into a separate agreement
to cover the terms of the sale of our shares or Individual Scripless Certificates of Payment.
Upon receipt of any proceeds from any sale,
subject to any restrictions imposed by ROC law and regulations, the depositary shall convert the proceeds into US dollars and distribute
the proceeds to you, net of any fees, expenses, taxes or governmental charges (including, without limitation, any ROC and U.S.
taxes) incurred in connection with the sale.
Although sales of HoldCo ADSs by a non-resident
individual or a corporation that has no fixed place of business or other permanent establishment or business agent in the territory
of the ROC are not currently subject to ROC taxation, sales of HoldCo Common Shares or Individual Scripless Certificates of Payment
by such individual or corporation will be subject to a securities transaction tax in the ROC.
In order to withdraw or instruct the sale
of the shares or Individual Scripless Certificates of Payment represented by your HoldCo ADSs, you will be required to pay to the
depositary the fees for cancellation of HoldCo ADSs and any charges and taxes payable upon the transfer of the shares or Individual
Scripless Certificates of Payment being withdrawn and you will be required to provide to the depositary the applicable withdrawal
certification. You assume the risk for delivery of all funds and securities upon withdrawal. Once canceled, the HoldCo ADSs will
not have any rights under the HoldCo Deposit Agreement.
You will not be entitled to withdraw
or instruct the sale of interests in any certificate(s) of payment representing shares underlying HoldCo ADSs until on or about
the fifth ROC business day following the Closing Date of a future HoldCo ADS offering.
If you hold a HoldCo ADR registered in
your name, the depositary may ask you to provide proof of identity and genuineness of any signature and such other documents as
the depositary may deem appropriate before it will cancel your HoldCo ADSs. The withdrawal of the shares or Individual Scripless
Certificates of Payment represented by your HoldCo ADSs may be delayed until the depositary receives satisfactory evidence of compliance
with all applicable laws and regulations. Please keep in mind that the depositary will only accept HoldCo ADSs for cancellation
that represent a whole number of securities on deposit.
ASE currently has, and upon completion
of the Share Exchange, HoldCo will have, reporting obligations under ROC law in respect of the HoldCo ADS facility. In order to
enable us to gather the information necessary for these reporting obligations, you will be asked to complete and sign a certification
upon withdrawal of shares or Individual Scripless Certificates of Payment from the HoldCo ADS facility. In this certification you
will be asked to disclose, among other information, the name, nationality and address of the beneficial owner of the HoldCo ADSs
presented for cancellation, the number of shares owned by the beneficial owner and whether certain affiliations exist between the
beneficial owner and us. The depositary will refuse to release shares or Individual Scripless Certificates of Payment to you until
you deliver a completed and signed certification to it.
In addition, the depositary shall not deliver
interests in certificate(s) of payment or shares to a surrendering holder of HoldCo ADSs unless such holder presents evidence of
payment of any securities transaction tax which may be imposed under ROC law unless we shall have advised the depositary that no
such tax is assessable in connection with the withdrawal of the individual certificate(s) of payment or shares hereunder.
If the shares or Individual Scripless Certificates
of Payment are withdrawn from the depositary facility, such holder will be required to provide information to enable HoldCo’s
compliance with its obligations set forth under the laws and regulations of the ROC, including a certification that:
|
·
|
the holder is or is not a “related person,” as such term is defined in the HoldCo Deposit Agreement, to us;
|
|
·
|
the holder will own a certain number of our shares after cancellation of the HoldCo ADSs surrendered thereby, as well as a
certain number of HoldCo ADSs representing our shares after cancellation of the HoldCo ADSs surrendered thereby;
|
|
·
|
the holder, or the person on whose account he acts, is the beneficial owner of the HoldCo ADSs surrendered to the HoldCo Depositary
thereby;
|
|
·
|
the name, address and nationality of the beneficial owner of the HoldCo ADSs, as included upon presentation of HoldCo ADSs
for cancellation, is true and correct;
|
|
·
|
the number of HoldCo ADSs surrendered and the number of shares withdrawn, as included upon presentation of HoldCo ADSs for
cancellation, is true and correct; and
|
|
·
|
if the presenter is a broker-dealer, the owner of the account for which he is acting has confirmed the accuracy of the above
representations.
|
In addition, you may be required to certify
to other information that we or the HoldCo Depositary may deem necessary or desirable to comply with any ROC disclosure or reporting
requirement.
The depositary will refuse to release Shares or the certificate(s) of payment to you until you deliver a completed
and signed certification to it.
You will have the right to withdraw the
securities represented by your HoldCo ADSs at any time except for:
|
·
|
Temporary delays that may arise because (i) the transfer books for the common shares or HoldCo ADSs are closed, or (ii) common
shares are immobilized on account of a shareholders’ meeting or a payment of dividends.
|
|
·
|
Obligations to pay fees, taxes and similar charges.
|
|
·
|
Restrictions imposed because of laws or regulations applicable to HoldCo ADSs or the withdrawal of securities on deposit.
|
|
·
|
Other instructions
specifically contemplated by Instruction (1) of the General Instructions to Form F-6
(as may be amended from time to time).
|
No common shares may be withdrawn upon
presentation of HoldCo ADSs (and if applicable, the HoldCo ADRs evidencing such HoldCo ADSs) for cancellation until (i) HoldCo
has delivered written confirmation that the number of Shares requested for withdrawal have been listed for trading on the TWSE
(such Shares, the “Listed Shares”) to the depositary and the custodian, (ii) the Listed Shares have been de-materialised
(such Shares, the “De-Materialised Shares,” and Shares that are both Listed Shares and De-Materialised Shares, hereinafter
referred to as the “Final Shares”), and (iii) an equivalent number of Final Shares are available at the facilities
of the custodian. HoldCo has informed the depositary that it is expected newly issued common shares which may be deposited by HoldCo
from time to time which are not listed for trading on the TWSE at the time of such deposit will be listed on the TWSE for trading
and will be fully de-materialised, thereby becoming Final Shares, no later than 5 ROC business days calendar days after any such
deposit. The depositary will deliver common shares represented by HoldCo ADSs (and if applicable, the HoldCo ADRs representing
such HoldCo ADSs) presented for cancellation only to the extent of the number of Final Shares then on deposit with the custodian,
the depositary will process presentations of HoldCo ADSs for withdrawal of Final Shares on a first come, first served basis, the
depositary will complete requests for cancellation of HoldCo ADSs and withdrawal of the common shares represented only to the extent
of the number of Final Shares at such time on deposit with the custodian, the depositary will refuse to complete a request for
cancellation of HoldCo ADSs and withdrawal of common shares to the extent the number of common shares requested for withdrawal
exceeds the number of Final Shares at such time deposited with the custodian, and the depositary reserves the right to suspend
withdrawals of common shares until such time as the requisite number of Final Shares are deposited with the custodian.
The HoldCo Deposit Agreement may not be
modified to impair your right to withdraw the securities represented by your HoldCo ADSs except to comply with mandatory provisions
of law.
Voting Rights
Except as described below, you generally
have no right under the HoldCo Deposit Agreement to instruct the depositary to exercise the voting rights for the Shares represented
by your HoldCo ADSs. Instead, by accepting HoldCo ADSs or any beneficial interest in HoldCo ADSs, you will be deemed to have authorized
and directed the
depositary
to appoint our Chairman or his designee to represent you at our shareholders’ meeting and to vote, without liability, the
common shares of HoldCo deposited with the custodian according to the terms of the HoldCo ADSs. The voting rights of holders of
Shares are described in “Description of HoldCo Common Shares — Voting Rights.”
The depositary will distribute to you notices
of shareholders’ meetings received from HoldCo together with information explaining how to instruct the depositary to exercise
the voting rights of the securities represented by HoldCo ADSs.
If HoldCo fails to timely provide the depositary
with its notice of meeting or other materials related to any meeting of owners of Shares, the depositary will endeavor to cause
all the deposited securities represented by HoldCo ADSs to be present at the applicable meeting, insofar as practicable and permitted
under applicable law, but will not cause those securities to be voted.
According to the ROC Company Law, except under limited
circumstances described below, generally a shareholder’s voting rights must, as to all matters brought to a vote of shareholders,
be exercised as to all shares held by the shareholder in the same manner, except in the case of an election of directors (including
independent directors), which may be conducted by means of cumulative voting or other mechanisms adopted in our Articles of Incorporation.
Pursuant to ROC Company Law and our Articles of Incorporation, the election of directors (including independent directors) is by
means of cumulative voting.
If the depositary timely receives voting
instructions from holders of at least 51% of the outstanding HoldCo ADSs to vote in the same manner regarding one or more resolutions
to be considered at the meeting, including the election of directors, the depositary will, subject to its receipt of satisfactory
opinions of counsel, notify and instruct the Chairman of HoldCo or his designee of the instructions to attend the meeting and vote
all the securities represented by the holders’ HoldCo ADSs in accordance with the direction received from holders at least
51% of the outstanding HoldCo ADSs.
If HoldCo has timely provided the depositary
with the materials described in the applicable HoldCo Deposit Agreement and the depositary has not timely received instructions
from holders of at least 51% of the outstanding HoldCo ADSs to vote in the same direction regarding any resolution to be considered
at the meeting, including the election of directors, and, provided the HoldCo Deposit Agreement allows the holder of HoldCo ADSs
to exercise its voting right on an individual basis, and any other matter where ROC law does not require a holder of the common
shares of HoldCo to vote all common shares of HoldCo in the same manner and subject to its receipt of satisfactory opinions of
counsel, and the depositary has secured satisfactory opinion of counsel, then you will be deemed to have authorized and directed
the depositary to give a discretionary proxy to the Chairman of HoldCo or his designee to attend and vote at the meeting the Shares
represented by your HoldCo ADSs in any manner such person may wish (which may not be in the interests of holders) unless the Chairman,
or such designated person, shall have informed the depositary that he does not wish to be so authorized and directed.
Proposal Rights
Holders of one percent or more of the
total and issued outstanding common shares of HoldCo will be entitled to submit one written proposal each year for consideration
at HoldCo’s annual ordinary meeting of stockholders provided that (i) the proposal is in the Chinese language and does not
exceed 300 Chinese characters, (ii) the proposal is submitted to us prior to the expiration of the period for submission of proposals
(the “Submission Period”) announced by us, (iii) only one (1) matter for consideration at our annual ordinary meeting
of shareholders is allowed in each proposal, and (iv) the proposing shareholder shall attend, in person or by a proxy, such annual
ordinary meeting whereat his or her or its proposal is to be discussed and such proposing shareholder, or his or her or its proxy,
shall take part in the discussion of such proposal.
As the holder of HoldCo Common Shares,
the depositary is entitled, provided the conditions of ROC law are satisfied, to submit only one (1) proposal each year in respect
of all of the common shares held on deposit. Holders and beneficial owners of HoldCo ADSs do not under ROC law have individual
rights to submit proposals to us but may be able to submit proposals to us for consideration at the annual ordinary meeting of
shareholders if the beneficial owners (i) timely present their HoldCo ADSs to the depositary for cancellation pursuant to the terms
of the HoldCo Deposit Agreement and become holders of HoldCo Common Shares in the ROC prior to the expiration of the Submission
Period and prior to the applicable shareholder proposal record date, and (ii) otherwise satisfy the conditions of ROC law applicable
to the submission of proposals to HoldCo for consideration at an annual ordinary meeting of our shareholders.
The depositary will, if so requested by
(a) beneficial owner(s) as of the applicable HoldCo ADS record date that own(s), individually or as a group, at least 51% of the
HoldCo ADSs outstanding as of the applicable HoldCo ADS record date, submit to us for consideration at the annual ordinary meeting
of HoldCo shareholders one (1) proposal each year, provided that certain terms and conditions as set forth in the HoldCo Deposit
Agreement are met.
The depositary will not be obligated to
provide to holders and beneficial owners of HoldCo ADSs any notices relating to the proposal rights, including, without limitation,
notice of submission period, or the receipt of any proposal(s) from submitting holders, or of the holdings of any HoldCo ADSs by
any persons, except that the depositary shall, upon a HoldCo ADS holder’s request, inform such holder of the total number
of HoldCo ADSs the issued.
Fees and Charges
As a HoldCo ADS holder, you will be required
to pay the following fees under the terms of the HoldCo Deposit Agreement:
Service
|
|
Fees
|
·
Issuance of HoldCo ADSs (e.g., an issuance upon a deposit of shares, upon a change in HoldCo ADS(s)-to-shares(s) ratio, or for any other reason), excluding issuances as a result of distributions of shares
|
|
Up to U.S. 5¢ per HoldCo ADS issued
|
|
|
|
·
Cancellation of HoldCo ADSs (e.g., a cancellation of HoldCo ADSs for delivery of deposited shares, upon a change in the HoldCo ADS(s)-to-share(s) ratio, or for any other reason)
|
|
Up to U.S. 5¢ per HoldCo ADS canceled
|
|
|
|
·
Distribution of cash dividends or other cash distributions (e.g., upon a sale of rights and other entitlements)
|
|
Up to U.S. 5¢ per HoldCo ADS held
|
|
|
|
·
Distribution of HoldCo ADSs pursuant to (i) stock dividends or other free stock distributions, or (ii) an exercise of rights to purchase additional HoldCo ADSs
|
|
Up to U.S. 5¢ per HoldCo ADS held
|
|
|
|
·
Distribution of securities other than HoldCo ADSs or rights to purchase additional HoldCo ADSs (e.g., spin-off shares)
|
|
Up to U.S. 5¢ per HoldCo ADS held
|
|
|
|
·
HoldCo ADS Services
|
|
Up to U.S. 5¢ per HoldCo ADS held on the applicable record date(s) established by the HoldCo Depositary
|
As a HoldCo ADS holder you will also be
responsible to pay certain charges such as:
|
·
|
taxes (including applicable interest and penalties) and other governmental charges;
|
|
·
|
the registration fees as may from time to time be in effect for the registration of common shares on the share register and
applicable to transfers of common shares to or from the name of the custodian, the HoldCo Depositary or any nominees upon the making
of deposits and withdrawals, respectively;
|
|
·
|
certain cable, telex and facsimile transmission and delivery expenses;
|
|
·
|
the expenses and charges incurred by the HoldCo Depositary in the conversion of foreign currency;
|
|
·
|
the fees and expenses incurred by the HoldCo Depositary in connection with compliance with exchange control regulations and
other regulatory requirements applicable to common shares, HoldCo ADSs and HoldCo ADRs; and
|
|
·
|
the fees and expenses incurred by the HoldCo Depositary, the custodian or any nominee in connection with the servicing or delivery
of deposited property.
|
HoldCo ADS fees and charges payable upon
(i) the issuance of HoldCo ADSs and (ii) cancellation of HoldCo ADSs will be payable by the person to whom the HoldCo ADSs are
so issued (in the case of HoldCo ADS issuances) and by the person whose HoldCo ADSs are being cancelled (in the case of HoldCo
ADS cancellations). In the case of HoldCo ADSs issued by the HoldCo Depositary into DTC or held via DTC, the HoldCo ADS issuance
and cancellation fees and charges will be payable by the DTC participant(s) receiving the HoldCo ADSs or whose HoldCo ADSs are
being cancelled, as the case may be, on behalf of the beneficial owner(s) and will be charged by the DTC participant(s) to the
account(s) of the applicable beneficial owner(s) in accordance with the procedures and practices of the DTC participant(s) as in
effect at the time. HoldCo ADS fees and charges in respect of distributions and the HoldCo ADS service fee are charged to the holders
as of the applicable HoldCo ADS record date. In the case of distributions of cash, the amount of the applicable HoldCo ADS fees
and charges is deducted from the funds being distributed. In the case of (i) distributions other than cash and (ii) the HoldCo
ADS service fee, holders as of the HoldCo ADS record date will be invoiced for the amount of the HoldCo ADS fees and charges and
such HoldCo ADS fees and charges may be deducted from distributions made to holders of HoldCo ADSs. For HoldCo ADSs held through
DTC, the HoldCo ADS fees and charges for distributions other than cash and the HoldCo ADS service fee may be deducted from distributions
made through DTC, and may be charged to the DTC participants in accordance with the procedures and practices prescribed by DTC
and the DTC participants in turn charge the amount of such HoldCo ADS fees and charges to the beneficial owners for whom they hold
HoldCo ADSs.
In the event of refusal to pay the HoldCo
Depositary fees, the HoldCo Depositary may, under the terms of the HoldCo Deposit Agreement, refuse the requested service until
payment is received or may set off the amount of the HoldCo Depositary fees from any distribution to be made to the HoldCo ADS
holder. Certain of the depositary fees and charges (such as the HoldCo ADS services fee) may become payable shortly after the Closing
Date. Note that the fees and charges you may be required to pay may vary over time and may be changed by us and by the HoldCo Depositary.
You will receive prior notice of such changes. The HoldCo Depositary may reimburse us for certain expenses incurred by us in respect
of the HoldCo ADR program, by making available a portion of the HoldCo ADS fees charged in respect of the HoldCo ADR program or
otherwise, upon such terms and conditions as we and the HoldCo Depositary agree from time to time.
The obligation of holders and beneficial
owners to pay HoldCo ADS fees and charges shall survive the termination of the HoldCo Deposit Agreement.
Amendments and Termination
HoldCo may agree with the HoldCo Depositary
to modify the HoldCo Deposit Agreement at any time without your consent. HoldCo will undertake to give holders 30 days’ prior
notice of any modifications that would materially prejudice any of their substantial rights under the HoldCo Deposit Agreement.
HoldCo will not consider to be materially prejudicial to your substantial rights any modifications or supplements that are reasonably
necessary for the HoldCo ADSs to be registered under the Securities Act or to be eligible for book-entry settlement, in each case
without imposing or increasing the fees and charges you are required to pay. In addition, HoldCo may not be able to provide you
with prior notice of any modifications or supplements that are required to accommodate compliance with applicable provisions of
law.
You will be bound by the modifications
to the HoldCo Deposit Agreement if you continue to hold your HoldCo ADSs after the modifications to the HoldCo Deposit Agreement
become effective. The HoldCo Deposit Agreement cannot be amended to prevent you from withdrawing the common shares represented
by your HoldCo ADSs (except as permitted by law).
We have the right to direct the HoldCo
Depositary to terminate the HoldCo Deposit Agreement. Similarly, the HoldCo Depositary may in certain circumstances on its own
initiative terminate the HoldCo Deposit Agreement. In either case, the HoldCo Depositary must give notice to the holders at least
30 days before termination. Until termination, your rights under the HoldCo Deposit Agreement will be unaffected.
After termination, the HoldCo Depositary
will continue to collect distributions received (but will not distribute any such property until you request the cancellation of
your HoldCo ADSs) and may sell the securities held on
deposit.
After the sale, the HoldCo Depositary will hold the proceeds from such sale and any other funds then held for the holders of HoldCo
ADSs in a non-interest-bearing account. At that point, the HoldCo Depositary will have no further obligations to holders other
than to account for the funds then held for the holders of HoldCo ADSs still outstanding (after deduction of applicable fees,
taxes and expenses).
Books of Depositary
The HoldCo Depositary will maintain HoldCo
ADS holder records at its depositary office. You may inspect such records at such office during regular business hours but solely
for the purpose of communicating with other holders in the interest of business matters relating to the HoldCo ADSs and the HoldCo
Deposit Agreement.
The HoldCo Depositary will maintain in
New York facilities to record and process the issuance, cancellation, combination, split-up and transfer of HoldCo ADSs. These
facilities may be closed from time to time, to the extent not prohibited by law.
Limitations on Obligations and Liabilities
The HoldCo Deposit Agreement limits HoldCo’
obligations and the HoldCo Depositary’s obligations to you. Please note the following:
|
·
|
HoldCo and the HoldCo Depositary are obligated only to take the actions specifically stated in the HoldCo Deposit Agreement
without negligence or bad faith.
|
|
·
|
The HoldCo Depositary disclaims any liability for any failure to carry out voting instructions, for any manner in which a vote
is cast or for the effect of any vote, provided it acts in good faith and in accordance with the terms of the HoldCo Deposit Agreement.
|
|
·
|
The HoldCo
Depositary disclaims any liability for any failure to determine the lawfulness or practicality
of any action, for the content of any document forwarded to you on our behalf or for
the accuracy of any translation of such a document, for the investment risks associated
with investing in common shares, for the validity or worth of the common shares, for
any tax consequences that result from the ownership of HoldCo ADSs, for the credit worthiness
of any third party, for allowing any rights to lapse under the terms of the HoldCo Deposit
Agreement, for the timeliness of any of our notices or for our failure to give notice.
|
|
·
|
HoldCo and the HoldCo Depositary will not be obligated to perform any act that is inconsistent with the terms of the HoldCo
Deposit Agreement.
|
|
·
|
HoldCo and the HoldCo Depositary disclaim any liability if we or the HoldCo Depositary are prevented or forbidden from or subject
to any civil or criminal penalty or restraint on account of, or delayed in, doing or performing any act or thing required by the
terms of the HoldCo Deposit Agreement, by reason of any provision, present or future of any law or regulation, or by reason of
present or future provision of the Articles of Incorporation of HoldCo, or any provision of or governing the securities on deposit,
or by reason of any act of God or war or other circumstances beyond our control.
|
|
·
|
HoldCo and the HoldCo Depositary disclaim any liability by reason of any exercise of, or failure to exercise, any discretion
provided for in the HoldCo Deposit Agreement or in our Articles of Incorporation or in any provisions of or governing the securities
on deposit.
|
|
·
|
HoldCo and the HoldCo Depositary further disclaim any liability for any action or inaction in reliance on the advice or information
received from legal counsel, accountants, any person presenting common shares for deposit, any holder of HoldCo ADSs or authorized
representatives thereof, or any other person believed by either of us in good faith to be competent to give such advice or information.
|
|
·
|
HoldCo and the HoldCo Depositary also disclaim liability for the inability by a holder to benefit from any distribution, offering,
right or other benefit that is made available to holders of common shares but is not, under the terms of the HoldCo Deposit Agreement,
made available to you.
|
|
·
|
HoldCo and the HoldCo Depositary may rely without any liability upon any written notice, request or other document believed
to be genuine and to have been signed or presented by the proper parties.
|
|
·
|
HoldCo and the HoldCo Depositary also disclaim liability for any consequential or punitive damages for any breach of the terms
of the HoldCo Deposit Agreement.
|
|
·
|
No disclaimer of any Securities Act liability is intended by any provision of the HoldCo Deposit Agreement.
|
Pre-Release Transactions
Subject to the terms and conditions of
the HoldCo Deposit Agreement, the HoldCo Depositary may issue to broker/dealers HoldCo ADSs before receiving a deposit of common
shares. These transactions are commonly referred to as “pre-release transactions,” and are entered into between the
HoldCo Depositary and the applicable broker/dealer. The HoldCo Deposit Agreement limits the aggregate size of pre-release transactions
(not to exceed 30% of the common shares on deposit in the aggregate) and imposes a number of conditions on such transactions (i.e.,
the need to receive collateral, the type of collateral required, the representations required from brokers, etc.). The HoldCo Depositary
may retain the compensation received from the pre-release transactions.
Taxes
You will be responsible for the taxes and
other governmental charges payable on the HoldCo ADSs and the securities represented by the HoldCo ADSs. HoldCo, the HoldCo Depositary
and the custodian may deduct from any distribution the taxes and governmental charges payable by holders and may sell any and all
property on deposit to pay the taxes and governmental charges payable by holders. You will be liable for any deficiency if the
sale proceeds do not cover the taxes that are due.
The HoldCo Depositary may refuse to issue
HoldCo ADSs, to deliver, transfer, split and combine HoldCo ADRs or to release securities on deposit until all taxes and charges
are paid by the applicable holder. The HoldCo Depositary and the custodian may take reasonable administrative actions to obtain
tax refunds and reduced tax withholding for any distributions on your behalf. However, you may be required to provide to the HoldCo
Depositary and to the custodian proof of taxpayer status and residence and such other information as the HoldCo Depositary and
the custodian may require to fulfill legal obligations. You are required to indemnify HoldCo, the HoldCo Depositary and the custodian
for any claims with respect to taxes based on any tax benefit obtained for you.
Foreign Currency Conversion
The HoldCo Depositary will arrange
for the conversion of all foreign currency received into U.S. dollars if such conversion is practical, and it will distribute
the U.S. dollars in accordance with the terms of the HoldCo Deposit Agreement (net of any fees and expenses incurred in converting
foreign currency, such as fees and expenses incurred in complying with currency exchange controls and other governmental requirements).
If the conversion of foreign currency is
not practical or lawful, or if any required approvals are denied or not obtainable at a reasonable cost or within a reasonable
period, the HoldCo Depositary may take the following actions in its discretion:
|
·
|
Convert the foreign currency to the extent practical and lawful and distribute the U.S. dollars to the holders for whom the
conversion and distribution is lawful and practical.
|
|
·
|
Distribute the foreign currency to holders for whom the distribution is lawful and practical.
|
|
·
|
Hold the foreign currency (without liability for interest) for the applicable holders.
|
Governing Law/Waiver of Jury Trial
The HoldCo Deposit Agreement and the HoldCo
ADRs will be interpreted in accordance with the laws of the State of New York. The rights of holders of common shares (including
common shares represented by HoldCo ADSs) are governed by the laws of the ROC.
AS A PARTY TO THE HOLDCO DEPOSIT AGREEMENT,
YOU WAIVE YOUR RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF THE HOLDCO DEPOSIT AGREEMENT OR THE HOLDCO ADRs AGAINST
US AND/OR THE HOLDCO DEPOSITARY.
Legal Matters
Baker & McKenzie, ROC counsel to ASE,
will render an opinion with respect to the validity of the HoldCo Common Shares to be issued in the Share Exchange.
Experts
The consolidated financial
statements of ASE, except SPIL, ASE’s investment in which is accounted for by use of the equity method, as of December
31, 2015 and 2016 and for each of the three years in the period ended December 31, 2016, incorporated in this proxy
statement/prospectus by reference from ASE 2016 20-F, and the effectiveness of ASE’s internal control over financial
reporting have been audited by Deloitte & Touche, as stated in their reports, which reports (1) express an unqualified
opinion on the consolidated financial statements and include an explanatory paragraph referring to the convenience
translation of New Taiwan dollar amounts into U.S. dollar amounts and (2) express an unqualified opinion on the effectiveness
of internal control over financial reporting and are incorporated by reference herein. The consolidated financial statements
of SPIL, ASE’s investment in which is accounted for by use of the equity method, have been audited by
PricewaterhouseCoopers, Taiwan, as stated in their report incorporated by reference to ASE 2016 20-F. Such financial
statements of ASE have been so incorporated in reliance upon the respective reports of such firms given upon their authority
as experts in accounting and auditing. All of the foregoing firms are independent registered public accounting firms.
The consolidated financial statements
of SPIL and management’s assessment of the effectiveness of internal control over financial reporting (which is included
in Management’s Annual Report on Internal Control over Financial Reporting) incorporated in this proxy statement/prospectus
by reference to SPIL 2016 20-F have been so incorporated in reliance
on the report of PricewaterhouseCoopers, Taiwan, an independent registered public accounting firm, given on the authority of said
firm as experts in auditing and accounting.
The audited consolidated
financial statements of SPIL, not separately presented in this proxy statement/prospectus, have been audited by
PricewaterhouseCoopers, Taiwan, an independent registered public accounting firm, whose report thereon is incorporated in
this proxy statement/prospectus by reference to ASE 2016 20-F. The audited financial statements of ASE, to the extent they relate
to SPIL, have been so included in reliance on the report of such independent registered public accounting firm given on the
authority of said firm as experts in auditing and accounting.
Enforceability
of Foreign Judgments in the ROC
Upon the completion of the Share Exchange,
HoldCo will be, a company limited by shares and incorporated under the ROC Company Law. It is expected that upon the completion
of the Share Exchange, the majority HoldCo’ directors, executive officers and supervisors and certain other parties named
herein will be residents of the ROC and a substantial portion of HoldCo’s assets and such persons are located in the ROC.
As a result, it may not be possible for investors to effect service of process on HoldCo or such persons outside the ROC, or to
enforce against any of their judgments obtained in courts outside of the ROC. ROC counsel has advised that any final judgment obtained
against us or such persons in any court other than the courts of the ROC in respect of any legal suit or proceeding arising out
of or relating to the Share Exchange will be enforced by the courts of the ROC without further review of the merits only if the
court of the ROC in which enforcement is sought is satisfied that:
|
·
|
the court rendering the judgment has jurisdiction over the subject matter according to the laws of the ROC;
|
|
·
|
the judgment and the court procedures resulting in the judgment are not contrary to the public order or good morals of the
ROC;
|
|
·
|
if the judgment was rendered by default by the court rendering the judgment, (i) we or such persons were duly served in the
jurisdiction of such court within a reasonable period of time in accordance with the laws and regulations of such jurisdiction,
or (ii) process was served on us or such persons with judicial assistance of the ROC; and
|
|
·
|
judgments of the courts of the ROC are recognized in the jurisdiction of the court rendering the judgment on a reciprocal basis.
|
A party seeking to enforce a foreign judgment
in the ROC would, except under limited circumstances, be required to obtain foreign exchange approval from the Central Bank of
the Republic of China (Taiwan) for the remittance out of the ROC of any amounts exceeding US$100,000 or its equivalent recovered
in respect of such judgment denominated in a currency other than NT dollars.
Where You
Can Find More Information
ASE files annual, quarterly and current
reports, proxy statements and other information with the SEC as required under the Exchange Act. ASE is currently, and upon completion
of the Share Exchange, HoldCo will be, subject to periodic reporting and other informational requirements of the Exchange Act,
as applicable to foreign private issuers. As a “foreign private issuer” and, under the rules adopted under the Exchange
Act, ASE is, and upon the completion of the Share Exchange, HoldCo will be, exempted from certain of the requirements of that Exchange
Act, including the proxy and information provisions of Section 14 of the Exchange Act and the reporting and liability provisions
applicable to officers, directors and significant shareholders under Section 16 of the Exchange Act. ASE files annual reports on
Form 20-F with the SEC and also furnishes reports on Form 6-K to the SEC.
You may read and copy any reports, statements
or other information filed by ASE or SPIL at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference Room. The SEC also maintains
an Internet website that contains reports, proxy and information statements, and other information regarding issuers that file
electronically with the SEC, including ASE and SPIL. The address of that site is www.sec.gov.
Investors may also consult ASE’s
or SPIL’s website for more information about ASE or SPIL, respectively. ASE’s website is http://www.aseglobal.com.
SPIL’s website is http://www.spil.com.tw. Information included on these websites is not incorporated by reference into this
proxy statement/prospectus.
ASE and SPIL have filed with the SEC a
registration statement on Form F-4 of which this proxy statement/prospectus forms a part. The registration statement registers
the HoldCo Common Shares to be issued to ASE shareholders in exchange for its ASE Common Shares in connection with the Share Exchange.
A related registration statement on Form F-6 has also been filed with the SEC to register HoldCo ADSs representing HoldCo Common
Shares. The registration statements and their exhibits and schedules contain additional relevant information about ASE and SPIL,
ASE Common Shares and ASE ADSs. As allowed by SEC rules, this proxy statement/prospectus does not contain all the information you
can find in the registration statement on Form F-4 filed by ASE and SPIL and the exhibits to the registration statement.
In addition, the SEC allows ASE to “incorporate
by reference” information into this proxy statement/prospectus, which means that ASE can disclose important information to
you by referring you to other documents filed separately with the SEC. The information incorporated by reference into this proxy
statement/prospectus is considered part of this proxy statement/prospectus, except for any information superseded by information
contained directly in this proxy statement/prospectus or in later filed documents incorporated by reference into this proxy statement/prospectus.
This proxy statement/prospectus incorporates
by reference the documents listed below that ASE and SPIL have previously filed with the SEC. These documents contain important
information about the companies, their respective financial condition and other matters.
ASE
SEC Filings
(File
No. 001-16125)
|
Period or File Date
|
|
|
Annual Report on
Form 20-F
|
Year ended December 31, 2016, filed on April
21, 2017
|
Current Report
on Form 6-K
|
Furnished on December 14, 2017 (Exhibit 99.1
only)
|
SPIL
SEC Filings
(File
No. 000-30702)
|
Period or File Date
|
Annual Report on
Form 20-F
|
Year ended December 31, 2016, filed on April
11, 2017
|
Current Report
on Form 6-K
|
Furnished on December 14, 2017 (Exhibit 99.1
only)
|
In addition, all annual reports on Form
20-F that ASE or SPIL files with the SEC and certain reports on Form 6-K that ASE furnishes to the SEC indicating, to the extent
designated therein, that they are so incorporated by reference into this proxy statement/prospectus, in each case after the date
of this proxy statement/prospectus and
prior
to the date of the ASE EGM and the SPIL EGM, will also be incorporated by reference into this proxy statement/prospectus. Such
documents filed or furnished by ASE are considered to be a part of this proxy statement/prospectus, effective as of the date such
documents are filed or furnished.
You can obtain any of these documents from
the SEC, through the SEC’s website at the address described above, or ASE or SPIL as applicable, will provide you with copies
of these documents, without charge, upon written or oral request to:
Advanced Semiconductor Engineering, Inc.
e-mail:
ir@aseglobal.com
Tel: +886-2-6636-5678
Room 1901, No. 333, Section 1 Keelung Rd.
Taipei, Taiwan, 110
Republic of China
Attention: Investor Relations
|
In the event of conflicting information
in this proxy statement/prospectus in comparison to any document incorporated by reference into this proxy statement/prospectus,
or among documents incorporated by reference, the information in the latest filed document controls.
You should rely only on the information
contained in or incorporated by reference into this proxy statement/prospectus. No one has been authorized to provide you with
information that is different from that contained in, or incorporated by reference into, this proxy statement/prospectus. This
proxy statement/prospectus is dated [DATE], 2017. You should not assume that the information contained in this proxy statement/prospectus
is accurate as of any date other than that date. You should not assume that the information incorporated by reference into this
proxy statement/prospectus is accurate as of any date other than the date of such incorporated document. Neither the delivery
of this proxy statement/prospectus to ASE shareholders nor the issuance of HoldCo Common Shares or HoldCo ADSs in connection with
the Share Exchange will create any implication to the contrary.
Part II
Information Not Required in Prospectus
|
Item 20.
|
Indemnification of Officers and Directors
|
The relationships between each Registrant
and its directors and officers are governed by the ROC Civil Code, the ROC Company Law and such Registrant’s articles of
incorporation. There is no written agreement between either Registrant and its directors and officers governing the rights and
obligations of such parties. Each person who was or is party or is threatened to be made a party to, or is involved in any threatened,
pending or completed action, suit or proceeding by reason of the fact that such person is or was either Registrant’s director
or officer, in the absence of willful misconduct or gross negligence on the part of such person in connection with such person’s
performance of duties as a director or officer, as the case may be, may be indemnified and held harmless by such Registrant to
the fullest extent permitted by applicable law.
|
Item 21.
|
Exhibits and Financial Statements Schedules
|
(a) Exhibits
* Previously filed.
** Filed herewith.
(a) The undersigned registrant hereby undertakes:
|
(1)
|
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
|
|
(i)
|
to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
|
|
(ii)
|
to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information
set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum
|
aggregate offering price set forth
in the “Calculation of Registration Fee” table in the effective registration statement; and
|
(iii)
|
to include any material information with respect to the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;
|
|
(2)
|
That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
|
|
(3)
|
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold
at the termination of the offering.
|
|
(4)
|
To file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A.
of Form 20-F at the start of any delayed offering or throughout a continuous offering.
|
(b) The undersigned registrant
hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s
annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934, (and where applicable, each filing
of an employee
benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange
Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) The undersigned registrant
hereby undertakes as follows:
|
(1)
|
That prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this
registration statement, by any person
or party
who is deemed to be an underwriter
within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for
by the applicable registration form with respect to the offerings by persons who may be deemed underwriters, in addition to the
information called for by the other Items of the applicable form.
|
|
(2)
|
That every prospectus (i) that is filed pursuant to the immediately preceding paragraph, or (ii) that purports to meet the
requirements of section 10(a)(3) of the Act and is used in connection with an offering of securities subject to Rule 415 (§
230.415 of this chapter), will be filed as a part
of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of
determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
|
(d) Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant
to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification
is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer of controlling
person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
(e) The undersigned registrant hereby undertakes:
(i) to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11,
or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail
or other equally prompt means, and (ii) to arrange or provide for a facility in the United States for the purpose of responding
to such requests. The undertaking
in
subparagraph (i) above includes information contained in documents filed subsequent to the effective date of the registration
statement through the date of responding to the request.
(f) The undersigned registrant hereby undertakes
to supply by means of a post-effective amendment all information concerning a transaction and the company being acquired involved
therein, that was not the subject of and included in the registration statement when it became effective.
SIGNATURES
Pursuant to the requirements of the
Securities Act, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Taipei, Taiwan on December 14, 2017.
|
ADVANCED SEMICONDUCTOR ENGINEERING, INC.
|
|
|
|
|
|
By:
|
/s/ Jason C.S. Chang
|
|
|
Name:
|
Jason C.S. Chang
|
|
|
Title:
|
Chairman and Chief Executive Officer
|
Pursuant to the requirements of the
Securities Act, this Registration Statement has been signed by the following persons in the capacities indicated and on December
14, 2017.
Signature
|
|
Title
|
|
|
|
/s/ Jason C.S. Chang
|
|
Director, Chairman of the Board of Directors and
Chief Executive Officer
|
Jason C.S. Chang
|
|
(principal executive officer)
|
|
|
|
*
|
|
Director, Vice Chairman of the Board of Directors and President
|
Richard H.P. Chang
|
|
|
|
|
|
*
|
|
Director and General Manager of China Region
|
Rutherford Chang
|
|
|
|
|
|
*
|
|
Director and Chief Operating Officer
|
Tien Wu
|
|
|
|
|
|
/s/ Joseph Tung
|
|
Director and Chief Financial Officer
|
Joseph Tung
|
|
(principal financial officer)
|
|
|
|
*
|
|
Director and General Manager , Kaohsiung Packaging Facility
|
Raymond Lo
|
|
|
|
|
|
*
|
|
Director and General Manager of ASE Chung Li Branch
|
Tien-Szu Chen
|
|
|
|
|
|
*
|
|
Director and General Manager of Corporate Affairs and Strategy of
China Region
|
Jeffrey Chen
|
|
|
|
|
|
*
|
|
Independent Director
|
Shen-Fu Yu
|
|
|
|
|
|
*
|
|
Independent Director
|
Ta-Lin Hsu
|
|
|
|
|
|
*
|
|
Independent Director
|
Mei-Yueh Ho
|
|
|
|
|
|
*
|
|
Controller and Vice President
|
Murphy Kuo
|
|
(principal accounting officer)
|
*By:
|
/s/ Jason C.S. Chang
|
|
|
Jason C.S. Chang
|
|
|
Attorney-in-fact
|
|
SIGNATURE OF AUTHORIZED REPRESENTATIVE
OF THE REGISTRANT
Pursuant to the Securities Act of 1933,
as amended, the undersigned, the duly authorized representative in the United States of Advanced Semiconductor Engineering, Inc.,
has signed this Registration Statement and any amendment thereto in the City of New York, New York, on December 14, 2017.
|
Cogency Global Inc.
|
|
|
|
|
|
By:
|
/s/ Colleen A. De Vries
|
|
|
Name:
|
Colleen A. De Vries
|
|
|
Title:
|
Senior Vice-President
|
SIGNATURES
Pursuant to the requirements of the
Securities Act, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Taipei, Taiwan on December 14, 2017.
|
SILICONWARE PRECISION INDUSTRIES CO., LTD.
|
|
|
|
|
|
By:
|
/s/ Bough Lin
|
|
|
Name:
|
Bough Lin
|
|
|
Title:
|
Chairman of the Board of the Directors
|
Pursuant to the requirements of the
Securities Act, this Registration Statement has been signed by the following persons in the capacities indicated and on December
14, 2017.
Signature
|
|
Title
|
|
|
|
/s/ Bough Lin
|
|
Chairman; Executive Vice President
|
Bough Lin
|
|
|
|
|
|
*
|
|
Vice Chairman; President
|
Chi-Wen Tsai
|
|
(principal executive officer)
|
|
|
|
*
|
|
Director
|
Wen-Lung Lin
|
|
|
|
|
|
*
|
|
Director; Senior Vice President; Chief Operating Officer
|
Yen-Chun Chang
|
|
|
|
|
|
*
|
|
Director
|
Randy Hsiao-Yu Lo
|
|
|
|
|
|
*
|
|
Director
|
Teresa Wang (Representative of Yang Fong Investment Co., Ltd)
|
|
|
|
|
|
*
|
|
Independent Director
|
John Hsuan
|
|
|
|
|
|
*
|
|
Independent Director
|
Tsai-Ding Lin
|
|
|
|
|
|
*
|
|
Independent Director
|
William W. Sheng
|
|
|
|
|
|
*
|
|
Vice President; Chief Financial Officer
|
Eva Chen
|
|
(principal financial officer and principal accounting officer)
|
*By:
|
/s/ Bough Lin
|
|
|
Bough Lin
|
|
|
Attorney-in-fact
|
|
Pursuant to the Securities Act of 1933,
as amended, the undersigned, the duly authorized representative in the United States of Siliconware Precision Industries Co.,
Ltd., has signed this Registration Statement and any amendment thereto in the City of New York, New York, on December 14, 2017.
(1) Advanced Semiconductor
Engineering, Inc. (“
ASE
”), a company incorporated under Republic of China (“
ROC
”) laws, with
its address at No. 26, Jingsan Rd, Nanzi District, Kaohsiung City, Taiwan; and
(2) Siliconware Precision
Industries Co., Ltd. (“
SPIL
” or the “
Company
”), a company incorporated under ROC laws, with
its address at No. 123, Section 3, Da Fong Road, Tantzu District, Taichung City, Taiwan.
WHEREAS each Party’s board of directors has passed a resolution
approving the Share Exchange.
NOW THEREFORE, IN WITNESS WHEREOF, the Parties have entered
into this Agreement as follows:
Subsidiaries, or departure of any employee or senior management,
resulting from or relevant to the announcement and contingency of this Agreement or transactions contemplated hereunder, provided
that SPIL’s directors have met their duty of care and duty of loyalty.
The general shareholders’
meetings of both Parties will consider resolutions to approve the transfer of all the issued and outstanding shares of both Parties
to HoldCo, and HoldCo will issue new shares to ASE’s shareholders, and pay the Cash Consideration to SPIL’s shareholders
as consideration, based on the Exchange Ratio and Cash Consideration provided under Article 3 hereof.
its exercise price per share as
of the Execution Date is NT$20.4, with the balance of the issued but not vested employee stock options amounting to 84,056,850
units.
exchanged for 1.25 Holdco American
depositary shares (each HoldCo American depositary share will represent two HoldCo common shares)). The actual number of ASE’s
shares expected to be exchanged under this Transaction will be based on the total number of shares issued by ASE as of the Share
Exchange Record Date.
changes are necessary under relevant
laws or regulations, or are required for processing purposes.
As of the Execution Date, subject to (a) pre-merger
notification requirements under the Hart–Scott–Rodino Antitrust Improvements Act of 1976 (as amended) and regulations
or rules promulgated thereunder (the “
HSR Act
”), (b) filing and/or notification under the Antitrust Laws of
any jurisdiction
outside the United States, (c) approval necessary
to be obtained from the SEC for the proxy statement, (d) requirements for the purposes of compliance with state or other local
securities, acquisitions and “blue sky” laws, and (e) in addition to other authorizations, consents, approvals, orders,
permits, notices, reports, notifications, registrations, qualifications and waivers, ASE’s execution hereof, and fulfillment
of obligations hereunder, and consummation of the Transaction and other transactions contemplated hereunder have been authorized
by the valid and effective resolution of ASE, and this Agreement constitutes a valid and legally binding obligation of ASE, enforceable
against ASE in accordance with its terms.
As of the Execution Date, subject to (a) pre-merger
notification requirements under the Hart–Scott–Rodino Antitrust Improvements Act of 1976 (as amended) and regulations
or rules promulgated thereunder (the “
HSR Act
”), (b) filing and/or notification under the Antitrust Laws of
any jurisdiction outside the United States, (c) approval necessary to be obtained from the SEC for the proxy statement, (d) requirements
for the purposes of compliance with state or other local securities, acquisitions and “blue sky” laws, and (e) in addition
to other authorizations, consents, approvals, orders, permits, notices, reports, notifications, registrations, qualifications and
waivers, SPIL’s execution hereof, and fulfillment of obligations hereunder, and consummation of the Transaction and other
transactions contemplated hereunder have been authorized by the valid and effective resolution of SPIL, and this Agreement constitutes
a valid and legally binding obligation of SPIL, enforceable against SPIL in accordance with its terms.
been incurred that would cause
a SPIL Material Adverse Effect Event to occur.
material entrustment agreement,
mortgage, trust, loan or other contracts to which they are parties, which are binding on them, or under which their properties
are subject matters; except that any such breach does not cause a SPIL Material Adverse Effect Event to occur or affect the fulfillment
of this Agreement by SPIL and SPIL Subsidiaries.
countries or regions are not
violated, to provide assistance and support to ASE in filing explanations, information and/or notifications to competent authorities
(including, but not limited to, filing on a several or joint basis of the relevant documentation to the Taiwan Fair Trade Commission
or the Ministry of Commerce of the People’s Republic of China, and filing of the relevant documentation on a several basis
to the United States Federal Trade Commission), in order for HoldCo and both Parties to receive approval or consent from all relevant
competent authorities required to complete the Share Exchange as soon as possible.
entrustment, a joint operation,
or an assumption of the entire business or assets from others (except for an assumption of the entire business or assets from others
in an aggregated transaction amount less than NT$500,000,000); or (c) any merger and acquisition without issuing HoldCo’s
shares, any sale of all or material assets or businesses of 100% Subsidiaries, any disposal of interest in material assets or businesses
of 100% Subsidiaries, or exclusive licensing of all or material patents or technologies of 100% Subsidiaries, provided, however,
if SPIL receives a Superior Proposal from a third party the conditions of which, in the respective opinions of SPIL’s audit
committee and board of directors, are more favorable than those of this Transaction, SPIL shall notify ASE in writing the entire
content of such Superior Proposal, and from the fifth business day following the delivery of notice to ASE, negotiate with, propose
to, inquire, deliberate with, contact, discuss, offer or consult with such third party. Both Parties agree that, if SPIL cannot
complete the Share Exchange under this Agreement due to its acceptance of a Superior Proposal as set forth above, SPIL shall pay
to ASE the amount of NT$17 billion as a termination fee for the Transaction.
scale as well as research innovation
achievements, thereby providing customers with more complete services and alleviate concerns of order transfers from customers
due to concentration risk. As a result of such independent operation model, the competition restriction concerns or disadvantages
to overall economic interests arising from the publicity and consummation of the Transaction can be avoided. Therefore, on the
basis that SPIL’s independent operation and concurrence of competition and cooperation between both Parties shall be maintained,
both Parties agree to file explanations on the arrangement of the Transaction to relevant Antitrust Law Enforcement Authorities
of Relevant Countries or Regions, to enable them to approve the Transaction.
relevant benefits of SPIL’s
directors as of the Execution Date. In addition, HoldCo may in no way dispose of its shares in SPIL without SPIL’s consent
(including, but not limited to, sale, pledge, or otherwise encumbrance), and SPIL’s board of directors may continue to operate
independently and determine the organizational structure, compensation and relevant benefits of SPIL, in order to facilitate the
maintenance of SPIL’s current and future independent business and operation model after the completion of the Share Exchange.
For the avoidance of doubt, upon resolution of each
Party’s board of directors and general shareholders’ meeting (including HoldCo’s promoters’ meeting) approving
this Agreement, the provisions of this Agreement regarding SPIL’s independent operation are deemed to comply with the laws
and regulations set forth in Article 11.2 hereof without violating the interest of HoldCo.
with laws, regulations and/or
applicable requirements under Article 4 hereof) to the bond holders thereof exercising their conversion rights after the Share
Exchange Record Date. In addition, HoldCo and SPIL shall separately agree to execute a supplemental indenture with the trustee
of SPIL Foreign Convertible Bonds whereby HoldCo and SPIL will become co-obligors in respect of the redemption of SPIL Foreign
Convertible Bonds and HoldCo agrees to pay the Cash Consideration (subject to adjustment in accordance with laws, regulations and/or
applicable requirements under Article 4 hereof) to the bond holders thereof exercising their conversion rights.
obligations under this Article
17.9 shall survive the subsequent rescission, cancellation, termination or non-existence, for any reason, of this Agreement, except
for any such information (1) which is generally known to the public due to reasons other than violation of this Agreement; (2)
whose disclosure is required in order to avoid a violation of relevant laws and regulations; or (3) has been obtained by a Party
from a third party who is legally entitled to obtain and disclose such information at the time when it obtains such document or
information from the other Party.
mailing of SEC Filings or the
Proxy Statements or any other documents filed or to be filed with SEC in connection with the Transaction.
As of June 29, 2016, no events listed in Article 7.3 hereof
causing any SPIL Material Adverse Effect Event which shall be disclosed occurred, provided that the Parties agree that SPIL may
update this Appendix 3 to this Agreement (i.e. the SPIL Disclosure Letter), to disclose the necessary events that occur from the
Execution Date until the Share Exchange Record Date.
Both Advanced Semiconductor Engineering
Inc. (“
ASE
”) and Siliconware Precision Industries Co., Ltd. (“
SPIL
”) are the world’s
leading companies in semiconductor packaging and testing sector. ASE and SPIL intend to enter into the Joint Share Exchange Memorandum
of Understanding (“
MOU
”) to newly establish an investment holding company (“
HoldCo
”) by joint
share exchange whereby both ASE and SPIL will become wholly-owned subsidiaries of HoldCo, in order to pursue their operating scale
and improve their overall operating performance while taking into account of the flexibility and efficiency of their individual
independent operations (“
Share Exchange
”). The Share Exchange will result in the exchange of all of ASE common
shares in consideration for newly issued common shares of HoldCo, at an exchange ratio of each ASE common share for 0.5 HoldCo
common share. Furthermore, the Share Exchange will result in the exchange of each of SPIL’s issued and outstanding shares
for NT$55 in cash payable by HoldCo. The fairness of the consideration for Share Exchange under MOU is described and evaluated
as below.
Financial position of ASE and SPIL for
the last two years and the first quarter of 2016 are summarized as below:
Sources: Audited financial statements of ASE for the years of
2014 and 2015 and reviewed financial statements for the first quarter of 2016.
Sources: Audited financial statements of SPIL for the years
of 2014 and 2015 and reviewed financial statements for the first quarter of 2016.
The consideration for Share Exchange will
be at an exchange ratio of each ASE common share for 0.5 HoldCo common share and each of SPIL’s issued and outstanding shares
for NT$55 in cash payable by HoldCo. After the completion of the Share Exchange, both ASE and SPIL will become wholly-owned subsidiaries
of HoldCo. The fairness of consideration for Share Exchange in respect of each of ASE and SPIL is described and evaluated as below:
In summary, it shall be fair and reasonable
for all of ASE’s issued and outstanding shares to be exchanged for and in consideration of newly issued common shares of
HoldCo at an exchange ratio of each ASE common share for 0.5 HoldCo common share resulting in ASE to become a wholly-owned subsidiary
of HoldCo.
There are many methods for evaluating
stock value. In practice, common methods include: market approach, such as market price approach (focusing on listed target companies;
the fair value can be estimated by market price on the stock exchange) and market comparison approach (based on financial
information of target companies
and their peers in the market, using market multiplier such as price-earnings ratio, price-book ratio for analysis and evaluation);
income approach; and cost approach.
Among these methods, income approach
requires the Company’s estimates of future cash flow, involving multiple assumptions and having a higher uncertainty. Given
its less objective nature compared to other methods, this method is not used. Cost approach examines and weighs SPIL’s business
model and capital structure. Therefore, it is not appropriate for valuation and also not used. As such, we intend to use the market
approach as primary evaluation method while taking into account of other non-quantitative factors, to evaluate the reasonable consideration
of the Share Exchange for SPIL.
Based on customer attributes,
business activities and business model, ChipMOS Technologies (Bermuda) Ltd. (“
ChipMOS
”), Chipbond Technology
Corporation (“
Chipbond
”) and Powertech Technology Inc. (“
Powertech
”) are selected as peers.
The following table lists the financial conditions of these 3 peers for the first quarter of 2016:
Source: Audited or reviewed
consolidated financial statements of three peers for the first quarter of 2016
As SPIL is a listed company with
its open market trading prices available for objective reference, this opinion sampled its recent publicly traded prices to evaluate
the average closing prices for 60, 90 and 180 business days up to and including the valuation date of May 25, 2016 as follows:
The reasonable value per share
of SPIL is estimated by calculating the net book value per share based on the financial information of SPIL and sampling the average
price-book ratios of publicly traded peers - ChipMOS, Chipbond and Powertech for comparison purposes. The price-book ratios of
publicly traded peers are calculated using their closing prices for 180 business days up to and including the valuation date of
May 25, 2016 for sampling purposes and based on the total equity attributable to owners of parent in the respective peer’s
consolidated financial statements for the first quarter of 2016, the number of common shares for respective peer obtained from
the Commerce and Industry Registration Enquiry System of Department of Commerce, Ministry of Economic Affairs and other financial
data. The reasonable reference price of SPIL is imputed as follows:
The reasonable value per share
of SPIL is estimated by calculating the earnings per share based on the financial information of SPIL and sampling the average
price-book ratios of publicly traded peers - ChipMOS, Chipbond and Powertech for comparison purposes. Earnings per share for the
four quarters ended the first quarter of 2016 are estimated, and thereby the average price-earnings ratios of publicly traded peers
are calculated, using their closing prices for 180 business days up to and including the valuation date of May 25, 2016 for sampling
purposes and based on the net profits attributable to owners of parent in the respective peer’s consolidated financial statements
for 2015 and the first quarter of 2016, the number of common shares for respective peer obtained from the Commerce and Industry
Registration Enquiry System of Department of Commerce, Ministry of Economic Affairs and other financial data. The reasonable reference
price of SPIL is imputed as follows:
Calculation results of value
of common shares under the foregoing evaluation methods are summarized as below. The above three methods have their theoretical
and practical basis. Therefore, for avoidance of biases in the evaluation process, the imputation used 33.3% for purposes of weighted
averaging by taking into account of other non-quantitative key factors with reference to the statistics of Bloomberg and the average
premium rate of 33.24% of the global merger and acquisition cases in semiconductor industry since the third quarter of 2015. On
these basis, the reasonable price range per share of SPIL shall be from NT$48.34 to NT$58.05. As such, we are of opinion that it
shall be fair and reasonable for each SPIL common share in exchange of NT$55 in cash.
In summary, ASE and SPIL are proposed to
become wholly-owned subsidiaries of HoldCo by the joint share exchange. In relation to the Share Exchange, I, as the accountant,
am of the opinion that it shall be fair and reasonable for each ASE common share in exchange for 0.5 HoldCo common share and each
SPIL common share in exchange of NT$55 in cash.
I am engaged to provide opinion of evaluation
on the fairness of the joint share exchange, through which ASE and SPIL are proposed to become wholly-owned subsidiaries of HoldCo.
I have been upholding the principles of
impartiality, objectiveness and independence in issuing the expert evaluation opinion on the fairness of the joint share exchange
through which ASE and SPIL are proposed to become wholly-owned subsidiaries of HoldCo.
Both Advanced Semiconductor Engineering
Inc. (“
ASE
”) and Siliconware Precision Industries Co., Ltd. (“
SPIL
”) are the world’s
leading companies in semiconductor packaging and testing sector. ASE and SPIL intend to enter into the Joint Share Exchange Agreement
to newly establish ASE Industrial Holding Co., Ltd. (“
HoldCo
”) by joint share exchange whereby both ASE and
SPIL will become wholly-owned subsidiaries of HoldCo, in order to pursue their operating scale and improve their overall operating
performance while taking into account of the flexibility and efficiency of their individual independent operations (“
Share
Exchange
”). The Share Exchange will result in the exchange of all of ASE common shares in consideration for newly issued
common shares of HoldCo, at an exchange ratio of each ASE common share for 0.5 HoldCo common share. Furthermore, the Share Exchange
will result in the exchange of each of SPIL’s issued and outstanding shares for NT$55 in cash payable by HoldCo (“
Cash
Consideration
”). The Cash Consideration is adjusted to NT$51.2 after deduction of cash dividends distribution of NT$2.8
per share and capital reserve cash distribution of NT$1 per share as resolved at SPIL’s annual general shareholder’s
meeting for 2016. The fairness of the consideration for the Share Exchange under the Share Exchange Agreement is described and
evaluated as below.
Financial position of ASE and SPIL for
the last two years and the first quarter of 2016 are summarized as below:
The consideration for Share Exchange will
be at an exchange ratio of each ASE common share for 0.5 HoldCo common share and each of SPIL’s issued and outstanding shares
for Cash Consideration of NT$55 payable by HoldCo. The Cash Consideration is adjusted to NT$51.2 after deduction of cash dividends
distribution of NT$2.8 per share and capital reserve cash distribution of NT$1 per share as resolved at SPIL’s annual general
shareholder’s meeting for 2016. After the completion of the Share Exchange, both ASE and SPIL will become wholly-owned subsidiaries
of HoldCo. The fairness of consideration for Share Exchange in respect of each of ASE and SPIL is described and evaluated as below:
In summary, it shall be fair and reasonable
for all of ASE’s issued and outstanding shares to be exchanged for and in consideration of newly issued common shares of
HoldCo at an exchange ratio of each ASE common share for 0.5 HoldCo common share resulting in ASE to become a wholly-owned subsidiary
of HoldCo.
There are many methods for evaluating
stock value. In practice, common methods include: market approach, such as market price approach (focusing on listed target companies;
the fair value can be estimated by market price on the stock exchange) and market comparison approach (based on financial information
of target companies and their peers in the market, using market multiplier such as price-earnings ratio, price-book ratio for analysis
and evaluation); income approach; and cost approach.
Among these methods, income approach
requires the Company’s estimates of future cash flow, involving multiple assumptions and having a higher uncertainty. Given
its less objective nature compared to other methods, this method is not used. Cost approach examines and weighs SPIL’s business
model and capital structure. Therefore, it is not appropriate for valuation and also not used. As such, we intend to use the market
approach as primary evaluation method while taking into account of other non-quantitative factors, to evaluate the reasonable consideration
of the Share Exchange for SPIL.
Based on customer attributes,
business activities and business model, ChipMOS Technologies (Bermuda) Ltd. (“
ChipMOS
”), Chipbond Technology
Corporation (“
Chipbond
”) and Powertech Technology Inc. (“
Powertech
”) are selected as peers.
The following table lists the financial conditions of these 3 peers for the first quarter of 2016:
As SPIL is a listed company with
its open market trading prices available for objective reference, this opinion sampled its recent publicly traded prices to evaluate
the average closing prices for 60, 90 and 180 business days up to and including the valuation date of June 29, 2016 as follows:
The reasonable value per share
of SPIL is estimated by calculating the net book value per share based on the financial information of SPIL and sampling the average
price-book ratios of publicly traded peers - ChipMOS, Chipbond and Powertech for comparison purposes. The price-book ratios of
publicly traded peers are calculated using their closing prices for 180 business days up to and including the valuation date of
June 29, 2016 for sampling purposes and based on the total equity attributable to owners of parent in the respective peer’s
consolidated financial statements for the first quarter of 2016, the number of common shares for respective peer obtained from
the Commerce and Industry Registration Enquiry System of Department of Commerce, Ministry of Economic Affairs and other financial
data. The reasonable reference price of SPIL is imputed as follows:
The reasonable value per share
of SPIL is estimated by calculating the earnings per share based on the financial information of SPIL and sampling the average
price-book ratios of publicly traded peers - ChipMOS, Chipbond and Powertech for comparison purposes. Earnings per share for the
four quarters ended the first quarter of 2016 are estimated, and thereby the average price-earnings ratios of publicly traded peers
are calculated, using their closing prices for 180 business days up to and including the valuation date of June 29, 2016 for sampling
purposes and based on the net profits attributable to owners of parent in the respective peer’s consolidated financial statements
for 2015 and the first quarter of 2016, the number of common shares for respective peer obtained from the Commerce and Industry
Registration Enquiry System of Department of Commerce, Ministry of Economic Affairs and other financial data. The reasonable reference
price of SPIL is imputed as follows:
Calculation results of value
of common shares under the foregoing evaluation methods are summarized as below. The above three methods have their theoretical
and practical basis. Therefore, for avoidance of biases in the evaluation process, the imputation used 33.3% for purposes of weighted
averaging by taking into account of other non-quantitative key factors with reference to the statistics of Bloomberg and the average
premium rate of 33.86% of the global merger and acquisition cases in semiconductor industry since the third quarter of 2015. On
these basis, the reasonable price range per share of SPIL shall be from NT$46.98 to NT$56.30. As such, we are of opinion that it
shall be fair and reasonable for each SPIL common share in exchange of Cash Consideration of NT$55 (the Cash Consideration is adjusted
to NT$51.2 after deduction of cash dividends distribution of NT$2.8 per share and capital reserve cash distribution of NT$1 per
share as resolved at SPIL’s annual general shareholder’s meeting for 2016).
In summary, ASE and SPIL are proposed to
become wholly-owned subsidiaries of HoldCo by the joint share exchange. In relation to the Share Exchange, I, as the accountant,
am of the opinion that it shall be fair and reasonable for each ASE common share in exchange for 0.5 HoldCo common share and each
SPIL common share in exchange of Cash Consideration of NT$55 (the Cash Consideration is adjusted to NT$51.2 after deduction of
cash dividends distribution of NT$2.8 per share and capital reserve cash distribution of NT$1 per share as resolved at SPIL’s
annual general shareholder’s meeting for 2016).
I am engaged to provide opinion of evaluation
on the fairness of the joint share exchange, through which ASE and SPIL are proposed to become wholly-owned subsidiaries of HoldCo.
I have been upholding the principles of
impartiality, objectiveness and independence in issuing the expert evaluation opinion on the fairness of the joint share exchange
through which ASE and SPIL are proposed to become wholly-owned subsidiaries of HoldCo.
If the following event occurs when a company is undergoing a
merger, consolidation, acquisition or division, a shareholder may request the company to repurchase his/her/its shares at the then
fair price of such shares:
Any shareholder who has made the request as provided in the
preceding paragraph shall submit a written request that specifies the requested repurchase price and deposit the certificates of
his/her/its shares within 20 days immediately following the date at which the shareholder resolutions are passed.
The company shall appoint an institution that is permitted by
law to provide corporate action services to handle the shares deposited by the dissenting shareholder. The shareholder shall deposit
his/her/its shares to such institution and the institution shall issue a certificate that specifies the type and amount of deposited
shares to the shareholder; any deposit by book-entry transfer shall be governed by the procedures set forth in the rules and regulations
in relation to the centralized securities depositary enterprises.
The request of a shareholder as provided in Paragraph 1 shall
lose its effect when the company abandons its corporate action as provided in the same paragraph.
If the company and the shareholder reach an agreement with respect
to the repurchase price, the company shall pay such repurchase price to the shareholder within 90 days immediately following the
date at which the shareholders’ resolutions are passed. If no agreement is reached, within 90 days immediately after the
date at which the shareholders’ resolutions are passed, the company shall pay for the shares of the shareholder with whom
it has not reached an agreement at a price determined by the company as the fair price for such shares; if the company fails to
make such payment, the company shall be deemed as having agreed to the repurchase price requested by the shareholder pursuant to
Paragraph 2.
If the company fails to reach an agreement with any shareholder
with respect to the repurchase price within 60 days immediately following the date at which the shareholders’ resolutions
are passed, the company shall, within 30 days after the expiry of the 60-day period, file a petition with a court for a ruling
to determine the fair price of the shares against all the shareholders with whom it has not reached an agreement as the opposing
parties. If the company fails to list any shareholder with whom it has not reached an agreement as an opposing party, or the petition
is withdrawn by the company or dismissed by the court, the company shall be deemed as having agreed to the repurchase price requested
by the shareholder pursuant to Paragraph 2. However, if the opposing party has already presented his/her/its position in the court
or the court’s ruling has already been delivered to the opposing party, the company shall not withdraw the petition unless
agreed to by the opposing party.
When the company files a petition with the court for a ruling
to determine the repurchase price, the company shall attach to the petition the audited and attested financial statements of the
company and the fair price assessment report by the certified public accountants, and written copies and photocopies thereof according
to the number of opposing parties for the court to distribute to each opposing party.
Before making a ruling with respect to the repurchase price,
the court shall allow the company and the opposing parties to have the chance to present their positions. If there are two or more
opposing parties, the provisions set out in Articles 41 to 44, as well as Paragraph 2 of Article 401 of the ROC Civil Procedure
Code shall apply
mutatis mutandis
.
If any party appeals against the ruling made pursuant to the
preceding paragraph, the court shall allow the parties at dispute to have the chance to present their positions before making a
decision on the appeal.
When the ruling with respect to the repurchase price becomes
final and binding, the company shall, within 30 days immediately after the ruling becomes final and binding, pay such final repurchase
price to the dissenting shareholders, deducting any previous payment and interest accrued since the next day of the expiry of the
90-day period immediately following the date at which the shareholders’ resolutions are passed.
The provisions set forth in Article 171 and Paragraphs 1, 2
and 4 of Article 182 of the ROC Non-Contentious Matters Act shall apply
mutatis mutandis
.
The company shall bear the expenses of the petition and the
appraiser’s compensation.