Vishay Proposes to Acquire General Semiconductor
Dr. Felix Zandman, chairman and CEO of Vishay Intertechnology Inc. (Malvern, PA) announced in a letter to Ronald A. Ostertag, chairman and CEO of General Semiconductor Inc. (Melville, NY) that Vishay has proposed to acquire General Semiconductor through a stock swap of one newly-issued Vishay share for two outstanding General Semiconductor shares.
The letter highlighted potential benefits of the combination to the stockholders of General Semiconductor and Vishay Intertechnology. The letter stated, "In the current environment, all industry participants will need to move aggressively to cut costs and to work creatively to preserve revenues. The complementary nature of our product lines should result in substantial operational and marketing synergies and provide natural opportunities for cost savings."
The letter continued, "Vishay's strong balance sheet coupled with General Semiconductor's reputation and market presence should create an ideal platform for growth through acquisitions in the semiconductor component market. Now may be a particularly opportune time to pursue such acquisitions, when adverse market conditions favor companies able to take the longer term perspective."
"Shareholders of both companies, but particularly of General Semiconductor, will benefit from being a part of a larger and more diverse enterprise that will have product offerings covering the full spectrum of active and passive electronic components."
The letter concluded by stating that, although a stock-for-stock transaction seemed most sensible for General Semiconductor stockholders, Vishay is prepared to discuss a transaction with a cash alternative, either in whole or in part.
Vishay's proposal is subject to customary conditions including diligence and regulatory approval.