23 December 2016

Aixtron to delist American depositary shares from NASDAQ and deregister with SEC

Deposition equipment maker Aixtron SE of Herzogenrath, Germany says that it intends to voluntarily delist its American depositary shares (ADSs) from The NASDAQ Global Select Market and deregister and terminate its reporting obligations under the Securities Exchange Act of 1934.

Trading over the past 12 months on NASDAQ accounted for less than 5% of the worldwide trading volume of Aixtron's ordinary shares, while nearly all of the rest was conducted through the firm's listing on the Frankfurt Stock Exchange. Given the comparatively low trading volumes on NASDAQ, Aixtron says that the complexity as well as the cost and effort associated with maintaining a dual listing, including reporting obligations with the US Securities and Exchange Commission (SEC), outweigh the benefits of continuing its listing and registration in the USA.

Aixtron agreed in late May to be taken over by Grand Chip Investment GmbH (GCI, a German limited liability company set up as a special-purpose investment vehicle). GCI's China-based parent firm Fujian Grand Chip Investment Fund LP is held 51% by Chinese businessman & private investor Zhendong Liu and 49% by Xiamen Bohao Investment Ltd (an investment entity indirectly controlled by Chinese private investors Zhongyao Wang and Wanming Huang). Fujian Grand Chip (FGC) hence said that it would launch a voluntary public takeover offer to acquire all of the outstanding ordinary shares of Aixtron SE, including all ordinary shares represented by Aixtron ADS (American depositary shares).

However, on 21 October the German Federal Ministry of Economics and Energy withdrew the Clearance Certificate issued on 8 September to FGC and reopened review proceedings in connection with the acquisition, citing that Aixtron's know-how comprises security-related technologies (in particular for the defense sector) that could be revealed through the acquisition.

Including its subsidiary Aixtron Inc in California, Aixtron's US business in 2015 comprised nearly 20% of the company's entire staff and accounted for more than 20% of global sales. Hence, following advice from the Committee on Foreign Investment in the United States (CFIUS), which is chaired by the US Department of the Treasury, on 2 December US President Barack Obama issued an executive order prohibiting the acquisition of Aixtron's US business by GCI (some of whose investors have Chinese government ownership, it is alleged).

CFIUS and the President assessed that the transaction posed a risk to the USA's national security that could not be resolved through mitigation. The risk related to the "military applications of the overall technical body of knowledge and experience of Aixtron… and the contribution of Aixtron's US business to that body of knowledge and experience". Aixtron makes metal-organic chemical vapor deposition (MOCVD) systems for growing semiconductors including gallium nitride (GaN), used in the manufacturing of not only light-emitting diodes (LEDs) but also, it is said, defense electronics.

Aixtron subsequently said that, as a consequence of Obama's order, the offer's condition - for clearance of the transaction by either CFIUS or the US President - had not been fulfilled. The public takeover process initiated by GCI had hence come to end, added Fujian Grand Chip.

While noting that it is in compliance with all its listing requirements, Aixtron has now provided written notice to NASDAQ of its intention to delist and expects to file a Form 25 'Notification of Removal from Listing' and/or registration under Section 12(b) of the Exchange Act with the SEC on or about 30 December. Aixtron anticipates that the last day of trading of the ADSs on NASDAQ will be on or about 30 December, after which they will be traded on the US over-the-counter market. The firm's ordinary shares will continue to trade on all German stock exchanges, including the Frankfurt Stock Exchange under the stock symbol 'AIXA'. Aixtron expects that delisting of the ADSs and deregistration will have no other impact on the ordinary shares' listing on the Frankfurt Stock Exchange.

Aixtron also intends to file a Form 15F with the SEC on or about 9 January 2017, in order to deregister and terminate its reporting obligations under the Exchange Act. Other filing requirements will terminate upon the effectiveness of the deregistration under Section 12(g) of the Exchange Act, which is expected to occur 90 days after filing Form 15F.

See related items:

China's Grand Chip abandons acquisition of Aixtron

Obama bars Fujian Grand Chip's takeover of Aixtron's US business

CFIUS advises US President to prohibit Grand Chip's takeover of Aixtron

Aixtron returns to positive free cash flow in Q3, boosted by sales of AIX R6 system inventory

Germany withdraws clearance of Grand Chip Investment's takeover of Aixtron

Aixtron agrees €670m takeover by Fujian Grand Chip Investment Fund

See: Aixtron Company Profile

Tags: Aixtron MOCVD

Visit: www.aixtron.com