Silicon Motion provides some details of the termination of the transaction by MaxLinear
On July 26th of this year, MaxLinear proclaimed its decision to exercise its contractual rights, thus terminating the acquisition of Silicon Motion. However, Silicon Motion vehemently rejected this abrupt cessation, alleging that MaxLinear had grievously and intentionally breached the merger agreement. This purported violation impeded the completion of the transaction by the stipulated date of August 7, 2023. In light of these circumstances, Silicon Motion expressed its intention to seek substantial damages for the perceived infractions.
Recently, Silicon Motion disseminated an announcement, revealing intricate details concerning MaxLinear’s termination of the transaction. Silicon Motion refuted MaxLinear’s claim that their “business suffered significant adverse effects and failed to operate normally post-signing of the merger agreement”. In stark contradiction to MaxLinear’s allegations, Silicon Motion underscored that, from the inception of the merger agreement to the issuance of the termination notice, MaxLinear never once alluded to any breach of operational norms. Rather, in the weeks, days, and even mere hours leading up to the issuance of the termination notice:
- MaxLinear approached Silicon Motion, seeking information in a bid to streamline the impending integration of the two entities.
- MaxLinear’s legal representatives informed China’s State Administration for Market Regulation (SAMR) of their intent to complete the necessary review processes by July 19, 2023. This would ensure the acquisition’s completion before the designated date of August 7, 2023. Notably absent in MaxLinear’s Q2 2023 performance report was any evaluation of the potential implications of this merger on its fiscal health.
- After procuring the approval from SAMR, Silicon Motion’s executive cadre extended their felicitations to MaxLinear’s Chief Financial Officer and Chief Executive Officer, in eager anticipation of finalizing the transaction. Yet, a mere 10 hours post receiving SAMR’s endorsement, Silicon Motion was blindsided with a termination notice from MaxLinear. This unforeseen development dealt a crushing blow to Silicon Motion’s board members, executives, and employees, who, since May 2022, had been relentlessly working towards the fruition of the merger agreement.
Silicon Motion is of the firm conviction that MaxLinear’s actions not only terminated but also egregiously violated the mutual merger agreement. Adhering to the stipulations of the merger agreement, Silicon Motion plans to initiate arbitration proceedings at the Singapore International Arbitration Centre, seeking redress for the colossal losses incurred, which extend well beyond the designated termination fees.
