Philips Plans to Sell Remaining Stake in TSMC

Philips Electronics and Taiwan Semiconductor Manufacturing have agreed to a multi-phased plan for Philips to sell its remaining 16.2% stake in TSMC valued at US$8.5 billion. Philips' CFO says it is a "logical consequence" following its exit from the semiconductor business. TSMC's VP and CFO says the firm "intends to make good use of our cash while reiterating our commitment to maintain our current annual cash dividend per share." Philips plans to sell US$1.75b of TSMC shares to long-term investors in Taiwan through the Taiwan Stock Exchange. In addition, US$2.5b will be sold in the form of American Depositary Shares in a public offering, expected to happen on the NYSE. Both parties have agreed not to conduct further ADS offerings. Furthermore, TSMC will buyback US$1.5b of its shares on the Taiwan Stock Exchange, in which Philips will participate, with future buybacks planned in 2008 and 2010. Philips says it will no longer have a board position at TSMC.

Sources: Press release, Forbes-AFX Newswire
Commentary: Taiwan Semi's Founder Predicts Gloom and Doom For the Chip Industry • Philips' Q4 Profit Doubles, Beats Estimates, Despite Drop in Sales
Stocks/ETFs to watch: Philips Electronics (PHG), Taiwan Semiconductor Mfg. (TSM). ETFs: BLDRS Emerging Markets 50 ADR Index (ADRE), iShares MSCI Emerging Markets Index (EEM), BLDRS Asia 50 ADR Index (ADRA)

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