(Reuters) – Canyon Bridge Capital Partners, the China-backed buyout fund that was barred last week by U.S. President Donald Trump from buying a U.S. chip maker, said it would purchase British chip designer Imagination Technologies Group Plc (IMG.L).
The all-cash 550 million pounds ($742.5 million) deal to buy Imagination Technologies is a clear sign that Canyon Bridge is continuing to pursue Western chip makers after its $1.3 billion deal to buy Lattice Semiconductor Corp (LSCC.O) in the United States was blocked over U.S. natural security concerns.
Canyon Bridge said on Friday it had agreed to pay 182 British pence per Imagination share, contingent on Imagination divesting U.S. chip designer MIPS, which Imagination had bought in 2013, the two companies said in a joint London stock exchange filing.
Keeping MIPS would subject Canyon Bridge’s purchase of Imagination Technologies to a review by the Committee on Foreign Investment in the United States (CFIUS), the government panel which rejected its acquisition of Lattice.
Imagination said it had agreed to sell MIPS for $65 million to Tallwood Venture Capital, an investment firm with offices in Palo Alto, California, and Wuxi, China. It was not immediately clear whether the divestment would be subject to a CFIUS review.
Canyon Bridge was founded with capital originating from China’s central government. It manages about $1.5 billion on behalf of Yitai Capital Ltd, a Chinese state-owned company, according to Friday’s statement.
The planned acquisition will not result in any job cuts, the two companies said.
Friday’s announcement came three months after Imagination put itself up for sale. Imagination had lost 70 percent of its value after being ditched by its biggest customer Apple Inc (AAPL.O), in a disappointing end to a once-great European tech success story. Imagination at the moment is in a legal dispute with Apple over royalties.
Reporting by Koh Gui Qing in New York; Editing by Lisa Shumaker