The Federal Commission on Economic Competition (Cofece) of Mexico authorized the merger between Yageo Corporation (Yageo) and KEMET Corporation (KEMET).
On November 12, 2019, Yageo announced its intention to acquire the outstanding shares of KEMET common stock for 27.20 per share in a cash transaction with a total value of $ 1.64 billion.
KEMET is a global manufacturer of passive electronic components that started manufacturing tantalum capacitors for the first time in 1958.
During fiscal year 2020, the company completed the process of modifying its vertical integration strategy by relocating its tantalum powder installation team from Carson City, Nevada, to its existing plant in Matamoros, Mexico.
KEMET claims that its operations in Mexico are among the most profitable in the world, and hopes that they will continue to be its main production facilities that support North American and European customers for solid capacitors.
The facilities in Victoria and Matamoros focus primarily on tantalum capacitors, while the facilities in Monterrey focus on ceramic capacitors.
Globally, the merger between the two companies continues as planned with several key milestones already completed.
Adjusted Operating Income Reconciliation
On February 4, 2020, the waiting period required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the review period under the Austrian Cartel Act expired, and the pending merger was approved by the Federal Cartel Office of Germany.
Then on February 20, KEMET shareholders approved the merger; on March 5, the Cofece of Mexico authorized the pending merger, and on April 15, the Taiwan Fair Trade Commission (TFTC) announced its approval of the merger.
On April 23, 2020, CFIUS notified KEMET and Yageo that they had completed their review of the merger and determined that there were no unresolved national security issues regarding the transaction.
Finally, on April 29, 2020, the Antitrust Office of the China State Market Regulation Administration approved the pending merger.
Cofece and the earrings
The only remaining regulatory approval required for the completion of the merger is the approval of the Investment Commission of the Taiwan Ministry of Economic Affairs. The company currently expects the transaction to close in the summer of 2020.
The Cofece is in charge of the prevention of concentrations whose object or effect is to decrease, damage or impede competition and free competition.
Likewise, the Cofece is empowered to challenge and sanction those concentrations and legal acts derived from them, whose object or effect is to decrease, damage or impede competition and free competition, in the production, distribution and marketing of goods and services in the Republic Mexican.
Therefore, the Cofece may authorize concentrations that are not contrary to the process of competition and free competition in terms of the Federal Law on Economic Competition.