Japan“s Toppan Printing Co. Ltd. said on 5 October 2004 that it would buy DuPont Photomasks Inc., the US-based maker of glass plates used to make semiconductors, for JPY 71 billion (USD 640 million)….
Japan“s Toppan Printing Co. Ltd. said on 5 October 2004 that it would buy DuPont Photomasks Inc., the US-based maker of glass plates used to make semiconductors, for JPY 71 billion (USD 640 million). Toppan, Japan“s second-largest printing company after Dai Nippon Printing, said the move would create the world“s largest maker of photomasks. The combined entity would have had a 36.7% share of the USD 1.8 billion worldwide photomask market in 2003, according to The Information Network, an industry research firm. The market is expected to grow 18.7% to about USD 2.1 billion in 2004. The new company could mean fiercer competition for US-based photomask maker Photronics Inc. and is expected to overtake Dai Nippon Printing, which was the world“s top player with 28.5% of the merchant market in 2003. “My initial impression of this deal is positive from the perspective that this will boost Toppan“s market share to the industry“s leading position,” said an analyst at a foreign brokerage that follows Toppan. “But the price paid by Toppan also strikes me as a bit high considering the state of DuPont“s earnings,” the analyst added. DuPont Photomasks lost USD 72 million in the previous business year ended 30 June 2004. Under the deal, DuPont Photomasks“ shareholders would receive USD 27.00 cash per share, a 48% premium on the 4 October 2004 closing price of USD 18.28. The takeover plan has been approved by the boards of directors of both companies. DuPont Photomasks“ largest shareholder, DuPont Co. of the USA, has agreed to vote its 20% holding of DuPont Photomask shares in favor of the deal. The transaction is subject to regulatory approval and approval from DuPont Photomasks“ shareholders and is expected to close in early 2005, the two companies said in the joint statement. The analyst said Toppan was aiming to use DuPont to gain greater access to US, Taiwanese and South Korean markets where DuPont has a strong presence. Toppan is solid in Japan, but has had less impact overseas. Toppan said the deal would also result in more efficient use of capital expenditures and research and development spending. “Photomasks are a core business for Toppan and are positioned as a key engine for our future growth,” Toppan President and Chief Executive Officer Naoki Adachi said in a statement jointly issued with the US company. “Through this acquisition, Toppan is moving to meet an evolving need among semiconductor manufacturers for comprehensive photomask product supply based on an advanced technology development capability, through a global network,” he said. Toppan said that upon the takeover it plans to incur JPY 26 billion in one-off charges. In May 2004, Toppan projected a group net profit of JPY 55.97 billion for the year ending March 2005, up about 23% from the previous year.