[News] China A-Share Firms Reportedly Scrap 20+ M&A Deals in Nov–Dec; Chip Sector Impacted

Hygon and Sugon have canceled their planned merger, highlighting a growing wave of scrapped M&A deals in China’s A-share market. According to Chinese outlet Yicai, several A-share listed semiconductor companies have recently scrapped M&A and restructuring plans. On December 12, VeriSilicon announced the termination of its proposed acquisition of 97.0070% of Nuclei System Technology, citing misalignment with the target company’s management and transaction counterparties on key terms, as well as concerns related to market conditions, regulatory requirements, and shareholder interests.

More broadly, as Yicai highlights, China’s A-share market has experienced a wave of M&A and restructuring terminations. From November 13 to December 13, at least 20 listed companies announced the termination or suspension of major asset restructuring plans, including several representative firms from the chip industry.

Jiemian News notes that VeriSilicon provides semiconductor IP licensing services and went public in 2020, earning the moniker “China’s first listed semiconductor IP company.” The company has said it will continue to strengthen its presence in the RISC-V ecosystem and, as a shareholder of Nuclei System Technology, will maintain and deepen cooperation with the firm, as indicated by China Securities Journal.

Meanwhile, according to China Securities Journal, VeriSilicon plans to jointly invest with co-investors in Tiansui Xinyuan, which will act as the acquisition vehicle to take control of Pixelworks. The company said the deal is expected to bolster its visual-processing capabilities and enhance its competitiveness in both edge-side and cloud-side AI ASIC markets.

More Semiconductor M&A Deals Fall Through

The collapse of the proposed transaction between VeriSilicon and Nuclei System Technology is not an isolated case. Yicai reports that analog chipmaker Dioo has likewise called off its plan to acquire 100% of 2PAI Semiconductor through a mix of share issuance and cash, after the parties failed to reach consensus on key terms such as deal structure, valuation, and performance commitments.

Yicai further notes that another analog chip company, 3PEAK, has recently terminated its plan to acquire an equity stake in Ningbo Aura Semiconductor, citing that conditions for carrying out a major asset restructuring have yet to fully mature. The report adds that the deal was abandoned just half a month after it was first announced.

In addition, National Business Daily also notes that on the evening of December 11, Landun Photoelectron disclosed plans to scrap its proposed purchase of a partial stake in Cygnus Semiconductor. The transaction—valued at RMB 80 million and aimed at strengthening the company’s positioning in the 5G chip segment—was ultimately terminated after nearly 18 months of preparation and agreement execution.

Key Reasons Behind Recent M&A Terminations

Regarding the disclosed reasons for deal cancellations, Yicai indicates that failure to reach agreement on core transaction terms has been the most common cause of recent M&A terminations. Citing industry sources, the report notes that market volatility—beyond the control of deal parties—can leave previously agreed pricing and deal structures benefiting only one side after share-price swings. Meanwhile, as the report adds, technology stocks often have long and uncertain earnings growth cycles; if sellers lack confidence in the certainty of future performance or are unwilling to accept buyers’ stringent performance commitments, negotiations may also stall.

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(Photo credit: Verisilicon)