UK Microchip Facility Ordered for Sale on National Interest and Security Grounds, US Advisory Firm Appointed for Potential Sale

…By Lola Smith for TDPel Media. Nexperia Newport, which was ordered by the UK Government to sell its microchip facility in South Wales on national interest and security grounds, has appointed US advisory firm ARTEG to advise on a possible sale of the facility.

Last year, the UK Government ruled that Amsterdam-based Nexperia – which is owned by Chinese and Shanghai-listed tech company Wingtech – divest at least an 86% stake in the business.

The UK Government used the National Security and Investment Act for its ruling.

Nexperia had earlier held a minority 14% shareholding in the facility that employs 500.

It acquired the business for just £63m from a company called Neptune Six.

As part of the deal that saw Nexperia acquiring 100% ownership, Neptune Six has a first right of refusal option to buy back the business in the event of Nexperia selling the business within a two-year window.

It is understood that the cost of any reacquisition is at the price which Nexperia acquired full control of the business at £63m.

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Alongside reacquiring the business (£63m), Neptune Six has identified a further £100m of required fundraising to position it as a world-leading producer of silicone carbide, needed to power advanced electric vehicles and reduce the time it takes charging points to power vehicles.

Analysis:

The appointment of a US advisory firm to advise on a possible sale of Nexperia Newport, following the UK Government’s order for the sale of the microchip facility on national interest and security grounds, underscores the sensitivity of foreign ownership of key UK assets.

The move towards possible UK sovereign supply chain capacity, in what is seen as a huge growth market globally, underscores the importance of microchip facilities in the wider context of climate change, advanced electric vehicles, and the creation of new hi-tech jobs.

The potential financial support to upgrade Fab 10 at the site from the Welsh Government, as well as the UK Government’s Automotive Transformation Fund, reflects the importance of cross-border collaboration and public-private partnership in unlocking the full potential of the microchip industry.

The reacquisition of the business by Neptune Six, which would not be led by Drew Nelson, would mark a new chapter in the history of the facility and pave the way for a renewed focus on innovation and growth in the years to come.

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