China’s Semiconductor Manufacturing International Corporation (SMIC) has just landed the final regulatory nod to buy out the remaining 49% stake in its Beijing-based SMNC unit. Now, SMNC will become a wholly owned subsidiary.
The China Securities Regulatory Commission (CSRC) gave the approval. This move lets SMIC issue a big chunk of A-shares to the five existing SMNC shareholders, wrapping up a long process that kicked off last August.
It’s a clear signal of China’s push to tighten its grip on strategic semiconductor manufacturing. SMIC also gets to beef up its 12-inch wafer operations in Beijing.
Deal details and regulatory approval
In a move that caps off months of regulatory review, SMIC will issue 547.2 million A-shares to five SMNC shareholders. The approval is good for 12 months.
The 49% stake comes in at a valuation of 40.6 billion yuan (about US$5.97 billion). Once it’s done, SMNC will be fully owned by SMIC, which already holds 51%.
SMIC will issue new shares at 74.20 yuan per share. There’s a 12-month lock-up for the selling shareholders.
Key terms of the acquisition
- Valuation and stake: 49% stake valued at 40.6 billion yuan; SMNC to be 100% owned by SMIC.
- Share issuance: 547.2 million A-shares issued to five SMNC shareholders at 74.20 yuan each.
- Lock-up period: 12 months for the sellers.
- Sellers: State-linked investors including the China Integrated Circuit Industry Investment Fund (the “Big Fund”), Beijing Semiconductor Manufacturing and Equipment Equity Investment Centre, Beijing E-Town International Investment & Development, Zhongguancun Development Group, and Beijing Industrial Investment.
- Big Fund’s allocation: Largest share of the allocation, at 357.3 million shares.
- Asset focus: SMNC operates a 12-inch wafer foundry in Beijing and is a core manufacturing base for SMIC.
SMIC said the acquisition should lift net profit and earnings per share (EPS). They expect to keep their core business steady.
Strategic significance for SMIC and Beijing’s semiconductor ecosystem
The consolidation of SMNC is a big step in SMIC’s effort to shore up its manufacturing in Beijing. SMNC is a key site for 12-inch wafer production.
With full ownership, SMIC can streamline governance and maybe get more efficient with scheduling and scale. It fits right in with China’s bigger plan to boost domestic chip production and cut back on reliance on outside suppliers for crucial semiconductor components.
On the financial side, SMIC figures the deal will improve its profitability. They estimated that basic earnings per share could rise from 0.49 yuan to 0.55 yuan for January–August 2025 if the acquisition had wrapped up earlier.
That bump in per-share earnings shows how a stronger asset base might pay off, even as SMIC keeps its focus on its main business and long-term growth.
Regulatory backdrop, market context, and what comes next
The approvals came after a regulatory process stretching back to August. There were some key moments, like the public disclosure in December and Star Market acceptance and review earlier this year.
The STAR Market (Shanghai’s tech board) has become a bit of a weather vane for China’s support of strategic industrial deals. It’s a sign of confidence in SMIC’s Beijing assets.
For investors and analysts, a couple of points stand out. The deal boosts SMIC’s manufacturing footprint at home and could improve profitability.
The heavy involvement of state-backed funds signals ongoing policy support for semiconductor self-reliance. The 12-month lock-up and the scale of the share issuance will shape the post-close equity picture and could nudge SMIC’s stock in the short term.
What to watch next
Now that the final regulatory step’s wrapped up, everyone’s watching the timing of the closing. People want to know when the SMNC shares will actually transfer, and how SMIC plans to fold SMNC into its bigger operations.
There are some big questions in the air. Will this move speed up SMIC’s Beijing-based 12-inch wafer production? Also, what’s going to happen to their capital structure, and how might that shake up R&D or future spending?
This deal kind of reflects China’s ongoing push for stronger advanced manufacturing, especially as the global semiconductor scene keeps shifting. It’s a moment that could say a lot about where things are headed.
Here is the source article for this story: China’s biggest contract chipmaker clears final hurdle for US$6 billion takeover