Summary

 

The following summary highlights selected information described in more detail elsewhere in this proxy statement/prospectus and the documents incorporated by reference into this proxy statement/prospectus and may not contain all the information that may be important to you. To understand the Share Exchange and the other transactions contemplated by the Joint Share Exchange Agreement and the matters being voted on by ASE shareholders and SPIL shareholders at their respective extraordinary shareholders’ meeting more fully, and to obtain a more complete description of the legal terms of the Joint Share Exchange Agreement, you should carefully read this entire document, including the annexes, and the documents to which ASE refers you. Each item in this summary includes a page reference directing you to a more complete description of that topic. See the section entitled “Where You Can Find More Information.”

 

The Parties (see page 72)

 

Advanced Semiconductor Engineering, Inc.

 

ASE is a company limited by shares incorporated under the laws of the ROC. ASE’s services include semiconductor packaging, production of interconnect materials, front-end engineering testing, wafer probing and final testing services, as well as integrated solutions for electronics manufacturing services in relation to computers, peripherals, communications, industrial, automotive, and storage and server applications.

 

ASE Common Shares are traded on the TWSE under the ticker “2311” and ASE ADSs are traded on the NYSE under the symbol “ASX.” ASE’s principal executive offices are located at 26 Chin Third Road, Nantze Export Processing Zone, Nantze, Kaohsiung, Taiwan, Republic of China, and the telephone number at the above address is +886-7-361-7131.

 

Siliconware Precision Industries Co., Ltd.

 

SPIL is a company limited by shares incorporated under the laws of the ROC. SPIL offers a full range of packaging and testing solutions, including advanced packages, substrate packages and lead-frame packages, as well as testing for logic and mixed signal devices. SPIL currently targets customers in the personal computer, communications, consumer integrated circuits and non-commodity memory semiconductor markets.

 

SPIL Common Shares are traded on TWSE under the ticker “2325” and SPIL ADSs are traded on NASDAQ under the symbol “SPIL.” The principal executive offices of SPIL are located at No. 123, Sec. 3, Da Fong Road, Tantzu, Taichung, Taiwan, Republic of China, and the telephone number is 886-4-2534-1525.

 

ASE Industrial Holding Co., Ltd.

 

It is expected that HoldCo will be a company limited by shares incorporated under the laws of the ROC and will be formed at the Effective Time. HoldCo will initially serve exclusively as the holding company for the ASE, SPIL, as well as their subsidiaries and investees. HoldCo will not have substantive assets or operations.

 

It is expected that HoldCo Common Shares will traded on the TWSE and HoldCo ADSs will be traded on the NYSE. It is expected that HoldCo’s principal executive offices will be located at Room 1901, No. 333, Section 1 Keelung Rd. Taipei, Taiwan, Republic of China and its telephone number at the above address will be +886-2-6636-5678.

 

The Share Exchange (see page 76)

 

ASE and SPIL have entered into a Joint Share Exchange Agreement pursuant to which a holding company, HoldCo, will be formed by means of a statutory share exchange pursuant to ROC law, and at the Effective Time, HoldCo will (i) acquire all issued shares of ASE in exchange for shares of HoldCo using the Exchange Ratio as described below, and (ii) acquire all issued shares of SPIL using the Cash Consideration as described below. Upon the consummation of the Share Exchange, ASE and SPIL will become wholly owned subsidiaries of HoldCo

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concurrently. Subject to the Share Exchange and the Joint Share Exchange Agreement being approved by shareholders of ASE and SPIL, and upon the satisfaction of the other conditions for completing the Share Exchange, HoldCo will be formed — and the Share Exchange is expected to become effective — on or around [DATE], 2017.

 

Pursuant to the terms and subject to the conditions set forth in the Joint Share Exchange Agreement, at the Effective Time:

 

(i)

for SPIL shareholders:

 

·

each SPIL Common Share, par value NT$10 per share, issued immediately prior to the Effective Time (including SPIL’s treasury shares and the SPIL Common Shares beneficially owned by ASE), will be transferred to HoldCo in consideration for the right to receive NT$51.2, which represents NT$55 minus a cash dividend and a return of capital reserve of NT$3.8 per SPIL Common Share distributed by SPIL on July 1, 2016, payable by HoldCo in cash in NT dollars, without interest and net of any applicable withholding taxes; and

 

·

each SPIL ADS will be cancelled in exchange for the right to receive through SPIL Depositary, the US dollar equivalent of NT$256 (representing five times of the SPIL Common Shares Cash Consideration) minus (i) all processing fees and expenses per SPIL ADS in relation to the conversion from NT dollars into US dollars, and (ii) US$0.05 per SPIL ADS cancellation fees pursuant to the terms of the SPIL Deposit Agreement payable in cash in US dollars, without interest and net of any applicable withholding taxes.

 

The Cash Consideration will be subject to adjustments if SPIL issues shares or pays cash dividends during the period from the execution date of the Joint Share Exchange Agreement to the Effective Time; provided, however, that the Cash Consideration shall not be subject to adjustment if the aggregate amount of the cash dividends distributed by SPIL in fiscal year 2017 is less than 85% of its after-tax net profit for fiscal year 2016.

 

(i)

for ASE shareholders:

 

·

each ASE Common Share, par value NT$10 per share, issued immediately prior to the Effective Time (including ASE’s treasury shares), will be transferred to HoldCo in consideration for the right to receive 0.5 HoldCo Common Shares; and

 

·

each ASE ADS, currently representing five ASE Common Shares, will, after the Effective Time, represent the right to receive 1.25 HoldCo ADSs, each HoldCo ADS representing two HoldCo Common Shares, upon surrender for cancellation to the ASE Depositary after the Effective Time.

 

Under ROC law, if any fractional HoldCo Common Shares representing less than one common share would otherwise be allotted to former holders of ASE Common Shares in connection with the Share Exchange, those fractional shares will not be issued to those shareholders. Pursuant to the Joint Share Exchange Agreement, ASE will aggregate the fractional entitlements and sell the aggregated ASE Common Shares using the closing price of ASE Common Shares on the TWSE on the ninth (9 ^th ) ROC Trading Day prior to the Effective Time, to an appointee of the Chairman of HoldCo. The cash proceeds from the sale will be distributed to the former holders of ASE Common Shares by HoldCo on a proportionate basis in accordance with their respective fractions at the Effective Time.

 

If you hold physical certificates, also known as ASE American depositary receipts (“ASE ADRs”), representing ASE ADSs, you will be sent a letter of transmittal after the Effective Time by the ASE Depositary, which is to be used to surrender your ASE ADSs to the ASE Depositary in exchange for HoldCo ADSs. The letter of transmittal will contain instructions explaining the procedure for surrendering the ASE ADSs in exchange for the HoldCo ADSs. YOU SHOULD NOT RETURN ASE ADRs WITH THE ENCLOSED PROXY CARD. The HoldCo ADSs will be issued in uncertificated, book-entry form, unless a physical HoldCo ADR is subsequently requested.

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If you hold ASE ADSs in uncertificated form registered directly on the books of the ASE Depositary, you will not be required to take any action after the Effective Time. The ASE Depositary will, after the Effective Time, exchange your ASE ADSs for the applicable HoldCo ADSs and send you a statement reflecting HoldCo ADSs issued in your name as a result of the Share Exchange and a check for the cash in lieu of any fractional HoldCo ADS to which you are entitled as a result of the Share Exchange.

 

Beneficial holders of ASE ADSs held in “street name” through a bank, broker or other financial institution with an account in DTC will not be required to take any action after the Effective Time to exchange ASE ADSs for HoldCo ADSs. After the Effective Time, ASE ADSs held in “street name” will be exchanged by the ASE Depositary via DTC for the applicable HoldCo ADSs and delivered in book-entry form via DTC to the applicable banks, brokers and other financial institutions for credit to their clients the beneficial owners of ASE ADSs.

 

The ASE Depositary will only distribute whole HoldCo ADSs. It will use commercially reasonable efforts to sell the fractional entitlements to HoldCo ADSs and distribute the net cash proceeds to the holders of ASE ADSs entitled to it.

 

Subject to approval at the ASE EGM, HoldCo will issue 3,961,811,298 HoldCo Common Shares (based on the number of issued shares of ASE on September 30, 2016) in connection with the Share Exchange.

 

The following chart depicts the organizational structure of each of ASE and SPIL before the Share Exchange as of the date of this proxy statement/prospectus and immediately after the Effective Time.

 

Before the Share Exchange as of the date of this proxy statement/prospectus:

 

 

Immediately after the Effective Time:

 

 

The ASE EGM (see page 73)

 

Date, Time and Place . The ASE EGM to vote for the Share Exchange and the other transactions contemplated by the Joint Share Exchange Agreement is expected to be held at [TIME] A.M. on [DATE], 2017 (Taiwan time), at Zhuang Jing Auditorium, 600 Jiachang Road, Nantze Export Processing Zone, Nantze District, Kaohsiung City, Taiwan, Republic of China.

 

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Purpose . The ASE EGM is being held to consider and vote on:

 

·

Proposal 1 To consider and to vote upon the joint share exchange agreement entered into between Advanced Semiconductor Engineering, Inc. and Siliconware Precision Industries Co., Ltd. on June 30, 2016 (the “Joint Share Exchange Agreement”) and the proposed share exchange and the other transactions contemplated by the Joint Share Exchange Agreement

 

·

Proposal 2. To consider and to vote upon the adoption of the articles of incorporation of ASE Industrial Holding Co., Ltd.

 

·

Proposal 3. To consider and to vote upon the Rules of Procedure for Shareholders’ Meetings of ASE Industrial Holding Co., Ltd.

 

·

Proposal 4. To consider and to vote upon the Rules Governing the Election of Directors and Supervisors of ASE Industrial Holding Co., Ltd.

 

·

Proposal 5. To consider and to vote upon the Procedures for Lending Funds to Other Parties of ASE Industrial Holding Co., Ltd. and Procedures of Making of Endorsement and Guarantees of ASE Industrial Holding Co., Ltd.

 

·

Proposal 6. To consider and to vote upon the Procedures for Acquisition or Disposal of Assets of ASE Industrial Holding Co., Ltd.

 

·

Proposal 7. To consider and elect the members of the board of directors and supervisors of ASE Industrial Holding Co., Ltd.

 

·

Proposal 8. To consider and to vote upon the proposal to waive the non-competition clauses applicable to newly elected directors of ASE Industrial Holding Co., Ltd.

 

Record Date; Voting Rights . Holders of ASE Common Shares will be entitled to exercise voting rights by electronic means or by attending the ASE EGM in person or by proxy, if they are recorded on ASE’s stockholder register on [DATE], 2017 (“ASE EGM Record Date”). Only ASE shareholders who hold ASE Common Shares of record on the ASE EGM Record Date are entitled to vote at the ASE EGM, or to exercise the appraisal rights conferred on dissenting shareholders by the laws of the ROC. Each ASE Common Share entitles its holder to one vote at the ASE EGM on each of the proposals. You may exercise voting rights by electronic means or by attending the ASE EGM in person or by proxy using a duly authorized power of attorney in the prescribed form attached to the notice of convocation distributed by ASE prior to the ASE EGM. You may exercise your voting right by electronic means beginning from the 15 ^th calendar day prior to the ASE EGM until the third calendar day prior to the day of the ASE EGM. Shareholders who intend to exercise their voting rights, electronically must log in to the website maintained by the TDCC (https://www.stockvote.com.tw) and proceed in accordance with the instructions provided therein.

 

Holders of ASE ADSs will be entitled to instruct the ASE Depositary (Citibank) as to how to vote the ASE Common Shares represented by ASE ADSs at the ASE EGM in accordance with the procedures set forth in this prospectus, if those holders were recorded on the ASE Depositary’s register on [DATE], 2017. In accordance with and subject to the terms of the ASE Deposit Agreement, holders of ASE ADSs have no individual voting rights with respect to the ASE Common Shares represented by their ASE ADSs. Pursuant to the ASE Deposit Agreement, each holder of ASE ADSs is deemed to have authorized and directed the ASE Depositary to appoint the Chairman of ASE or his/her designee, as Voting Representative of the ASE Depositary, the custodian or the nominee who is registered in the ROC as representative of the holders of ASE ADSs to vote the ASE Common Shares represented by ASE ADSs as more fully described below.

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In accordance with and subject to the terms of the ASE Deposit Agreement, if holders of ASE ADSs together holding at least 51% of all the ASE ADSs outstanding as of the record date set by the ASE Depositary for the ASE EGM to vote on the proposed Share Exchange and the other transactions contemplated by the Joint Share Exchange Agreement, instruct the ASE Depositary, prior to the ASE ADS voting instructions deadline, to vote in the same manner with respect to the Share Exchange and the other transactions contemplated by the Joint Share Exchange Agreement, the ASE Depositary shall notify the Voting Representative and appoint the Voting Representative as the representative of the ASE Depositary and the holders of ASE ADSs to attend the ASE EGM and vote all ASE Common Shares represented by ASE ADSs outstanding in the manner so instructed by such holders. If voting instructions are received from an ASE ADS holder by the ASE Depositary as of the ASE ADS voting instructions deadline which are signed but without further indication as to voting instructions, the ASE Depositary shall deem such holder to have instructed a vote in favor of the items set forth in such instructions.

 

Furthermore, in accordance with and subject to the terms of the ASE Deposit Agreement, if, for any reason, the ASE Depositary has not, prior to the ASE ADS voting instructions deadline, received instructions from holders of ASE ADSs together holding at least 51% of all ASE ADSs outstanding as of the record date set by the ASE Depositary for the ASE EGM to vote for the proposed Share Exchange and the other transactions contemplated by the Joint Share Exchange Agreement, to vote in the same manner with respect to the proposed Share Exchange and the other transactions contemplated by the Joint Share Exchange Agreement, the holders of all ASE ADSs shall be deemed to have authorized and directed the ASE Depositary to give a discretionary proxy to the Voting Representative, as the representative of the holders of ASE ADSs, to attend the ASE EGM and vote all the ASE Common Shares represented by ASE ADSs then outstanding in his/her discretion; provided, however, that the ASE Depositary will not give a discretionary proxy as described if it fails to receive under the terms of the ASE Deposit Agreement a satisfactory opinion from ASE’s counsel prior to the ASE EGM. In such circumstances, the Voting Representative shall be free to exercise the votes attaching to the ASE Common Shares represented by ASE in any manner he/she wishes, which may not be in the best interests of the ASE ADS holders. [The Voting Representative has informed ASE that he plans as of the date of this proxy statement/prospectus to vote in favor of all of the proposals at the ASE EGM, although he has not entered into any agreement obligating him to do so.]

 

Vote Required . The Share Exchange cannot be completed without ASE shareholders approving, among other things, the completion by ASE of the Share Exchange and the other transactions contemplated by the Joint Share Exchange Agreement by either (x) the approval of one-half of the ASE Common shares present at the ASE EGM if at least two-thirds of the outstanding ASE Common Shares attend the ASE EGM, or (y) the approval of two-thirds of the ASE Common Shares present at the ASE EGM if at least one-half of the outstanding ASE Common Shares attend the ASE EGM. Each ASE shareholder is entitled to one vote per share.

 

As of [ · ], 2017, there were [ · ] ASE Common Shares (including those represented by ASE ADSs) outstanding. As of [ · ], 2017, ASE directors and executive officers, as a group, beneficially owned and were entitled to vote [ · ] ASE Common Shares, or approximately [ · ]% of the total outstanding share capital of ASE. ASE currently expects that these directors and executive officers will vote their ASE Common Shares that are held at the ASE EGM Record Date in favor of all of the proposals at the ASE EGM, although none of them has entered into any agreement obligating them to do so.

 

Under ROC law, ASE is prohibited from soliciting proxies, consents or authorizations at its shareholders’ meetings, including the ASE EGM which the Share Exchange and the other transactions contemplated by the Joint Share Exchange Agreement will be voted upon. However, ASE Enterprises Limited (“ASEE”), a shareholder of ASE beneficially holding approximately [ · ]% of the total outstanding share capital of ASE as of the date of this proxy statement/prospectus, has expressed that it plans to vote in favor of all of the proposals at the ASE EGM and intends to solicit proxies in favor of the authorization and approval of the Share Exchange and the other transactions contemplated by the Joint Share Exchange Agreement prior to the ASE EGM. ASEE is controlled by ASE’s Chairman and Chief Executive Officer Jason C.S. Chang.

 

Recommendation and Approval of the ASE Board and Reasons for the Share Exchange (see page 36)

 

The ASE Board recommends that ASE shareholders vote “FOR” each of the proposals to be presented at the ASE EGM.

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In the course of reaching its decision to approve the Share Exchange and the other transactions contemplated by the Joint Share Exchange Agreement, the ASE board of directors (the “ASE Board”) considered a number of factors in its deliberations. For a more complete discussion of these factors, see the section entitled “Special Factors —Recommendation and Approval of the ASE Board and Reasons for the Share Exchange.”

 

Interests of ASE in SPIL Common Shares and ADSs (see page 38)

 

On October 1, 2015, ASE closed its acquisition of, and paid for, 779,000,000 SPIL Common Shares (including those represented by SPIL ADSs) pursuant to the tender offers in the U.S. and in the ROC (the “Initial ASE Tender Offers”). In March and April 2016, ASE acquired an additional 258,300,000 SPIL Common Shares (including those represented by SPIL ADSs) through open market purchases. As of the date of this proxy statement/prospectus, ASE held 988,847,740 SPIL Common Shares and 9,690,452 SPIL ADSs, representing 33.29% of the issue and outstanding share of SPIL.

 

Except as set forth elsewhere in this proxy statement/prospectus: (a) none of ASE and, to ASE's knowledge, any associate or majority-owned subsidiary of ASE beneficially owns or has a right to acquire any SPIL Common Shares, SPIL ADSs or other equity securities of SPIL; (b) none of ASE and, to ASE's knowledge, any associate or majority-owned subsidiary of ASE has effected any transaction in SPIL Common Shares, SPIL ADSs or other equity securities of SPIL during the past 60 days; and (c) during the two years before the date of this proxy statement/prospectus, there have been no transactions between ASE, its subsidiaries, on the one hand, and SPIL or any of its executive officers, directors, controlling shareholders or affiliates, on the other hand, that would require reporting under SEC rules and regulations.

 

Opinions of ASE’s Independent Expert (see page 39)

 

On May 25, 2016, Mr. Ji-Sheng Chiu, CPA, of Crowe Horwath (TW) CPAs Firm, an independent expert engaged by ASE, delivered to ASE its written opinion (the “First Crowe Horwath Opinion”) that the cash consideration of NT$55 per SPIL Common Share to be paid by HoldCo under the Share Exchange and the Exchange Ratio in which ASE Common Shares will be exchanged for HoldCo Common Shares as stipulated in the Joint Share Exchange Memorandum of Understanding (“Joint Share Exchange MOU”) were reasonable and fair. On June 29, 2016, Mr. Ji-Sheng Chiu delivered to ASE an opinion that the Cash Consideration (including conditions for adjustments) per SPIL Common Share to be paid by HoldCo in the Share Exchange and the Exchange Ratio in which ASE Common Shares will be exchanged for HoldCo Common Shares as stipulated in the Joint Share Exchange Agreement were reasonable and fair (the “Second Crowe Horwath Opinion,” and together with the First Crowe Horwath Opinion, the “Crowe Horwath Opinions”). The Crowe Horwath Opinions will be available for any interested ASE shareholder (or any representative of an ASE shareholder who has been so designated in writing) to inspect and copy at ASE’s principal executive offices during regular business hours.

 

Financing of the Share Exchange (see page 48)

 

HoldCo intends to fund the Cash Consideration (including the NT$51.2 per SPIL Common Share Cash Consideration payable to holders of the foreign convertible bonds issued by SPIL on October 31, 2014 (“SPIL Convertible Bonds”) that have not been otherwise redeemed or repurchased by the SPIL, or cancelled or converted prior to the Effective Time), which is an aggregate amount of approximately NT$173.16 billion (US$5.54 billion), with a combination of ASE’s cash on hand and debt financing. Subject to the amount of cash on hand at the time when ASE arranges for financing, ASE may arrange bank loans up to NT$173 billion (US$5.53 billion) with a combination of a syndication loan of NT$120 billion (US$3.84 billion) and a short-term bridge loan of NT$53 billion (US$1.69 billion). In a highly confident letter dated November 7, 2016 issued by Citibank Taiwan Limited (“Citibank”) to ASE, Citibank stated that it is highly confident of its ability to arrange debt facilities for the Share Exchange up to an amount of US$3.8 billion equivalent, subject to the terms and conditions set forth in that letter. In another highly confident letter dated November 16, 2016 issued by DBS Bank Ltd., Taipei Branch (“DBS”) to ASE, DBS stated that it is confident of its ability to arrange debt facilities for the Share Exchange up to an amount of NT$53 billion (US$1.69 billion), subject to the terms and conditions set forth in that letter. In addition, ASE may enter into other arrangements or transactions, including through a capital increase in cash to reduce the amount of bank loans on or prior to the Effective Time.

 

Board of Directors and Management of HoldCo Following Completion of the Share Exchange (see page 48)

 

Under ROC law, since HoldCo has not come into existence before the Effective Time, ASE will hold a shareholders’ meeting for ASE's shareholders (also the incorporators of HoldCo) to elect members of the board of directors and supervisors for HoldCo. The ASE EGM will function as HoldCo’s incorporator’s meeting by operation

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of law. Therefore, at the ASE EGM, shareholders of ASE will elect the members of the board of directors and supervisors of HoldCo.

 

Under the terms of the Joint Share Exchange Agreement, at HoldCo’s incorporator’s meeting, nine to 13 directors and three supervisors will be elected for HoldCo, which terms of such directors and supervisors will start from the Effective Time. SPIL’s Chairman and President are expected to be appointed as directors on HoldCo’s board of directors. After the completion of the Share Exchange, subject to ASE shareholders adopting the HoldCo director and supervisor election proposals, the board of directors of HoldCo is expected to include [●] (management director, Chairman), [●] (management director), [●] (management director), [●] (management director), [●] (management director), [●] (management director), [●] (management director), [●] (management director), [●] (management director), [●] (non-management director), [●] and [●]. [●], [●] and [●] are expected to be the supervisors of HoldCo.

 

From and after the Effective Time, the board of directors of HoldCo will establish an audit committee which will consist of one non-management director, [●], who is expected to be independent under Rule 10A-3 of the Exchange Act and financially literate with accounting or related financial management expertise. ASE is currently, and upon completion of the Share Exchange, HoldCo will be, subject to NYSE corporate governance, as applicable to foreign private issuers. It is expected that the audit committee of HoldCo established on the Effective Time would satisfy and comply with the requirements of section 303A.06 of the NYSE Listing Company Manual.

 

Certain ROC and U.S. Federal Income Tax Consequences of the Share Exchange (see page 48)

 

ROC Taxation

 

Capital gains realized upon the Share Exchange are exempt from ROC income tax. In the view of Baker & McKenzie, by reasonable interpretation of the ROC Mergers and Acquisitions Act based on current rules and regulations promulgated by ROC tax authority, ASE’s shareholders should not be subject to ROC securities transaction tax upon the Share Exchange. See the section entitled “Special Factors — Certain ROC and U.S. Federal Income Tax Consequences of the Share Exchange for Holders of ASE Common Shares or ADSs — ROC Taxation” for further discussion.

 

United States Taxation

 

Based on certain representations from ASE and assuming ASE has not been a PFIC for any taxable year during which the U.S. Holder has owned ASE Common Shares or ADSs, a U.S. Holder (as defined below) of ASE Common Shares or ASE ADSs is not expected to recognize any gain or loss for U.S. federal income tax purposes upon an exchange of ASE Common Shares or ASE ADSs for HoldCo ADSs (or shares represented by such HoldCo Common Shares or HoldCo ADSs) in the Share Exchange, except with respect to any cash received in respect of fractional HoldCo Common Shares or fractional HoldCo ADSs or paid to dissenting U.S. Holders. See the section entitled “Special Factors — Certain ROC and U.S. Federal Income Tax Consequences of the Share Exchange for Holders of ASE Common Shares or ADSs— United States Taxation” for further discussion.

 

Accounting Treatment of the Share Exchange (see page 54)

 

Under IFRS, the Cash Consideration paid by HoldCo pursuant to the Share Exchange will be accounted for by applying the acquisition method of accounting with HoldCo being considered the acquirer of SPIL for accounting purposes. Upon the completion of the Share Exchange, HoldCo would obtain control of SPIL and any equity interest previously held in SPIL accounted for as equity method investments is treated as if it were disposed of and reacquired at fair value on the acquisition date. Accordingly, it is remeasured to its acquisition-date fair value, and any resulting gain or loss compared to its carrying amount is recognized in profit or loss. HoldCo will measure the identifiable assets acquired and the liabilities assumed at their acquisition-date fair values, and recognize goodwill as of the acquisition date measured as the excess of the Cash Consideration and the fair value of the ASE’s previously held equity interest in SPIL over the net of the acquisition-date fair value of the identifiable assets acquired and the liabilities assumed. Goodwill is not amortized but is tested for impairment at least annually.

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Under IFRS, the exchange of ASE Common Shares for HoldCo Common Shares and the exchange of ASE ADSs for HoldCo ADSs based on the Exchange Ratio will be accounted for as a legal reorganization of entities under common control. ASE and HoldCo are ultimately controlled by the same shareholders both before and after the Share Exchange and that control is not transitory, therefore the Share Exchange under common control will not be accounted for by applying the acquisition method as above. Accordingly, ASE will recognize no gain or loss in connection with the exchange of ASE shares for HoldCo shares upon the Share Exchange under common control, and all assets and liabilities of ASE will be recorded on the books of HoldCo at the predecessor carrying amounts.

 

Regulatory Approvals Required to Complete the Share Exchange (see page 55)

 

The completion of the Share Exchange is subject to obtaining antitrust and other regulatory approvals in certain jurisdictions, as noted below. ASE and SPIL submitted the required materials to the Taiwan Fair Trade Commission (the “TFTC”) on July 29, 2016 and the TFTC issued a no objection letter in respect of the Share Exchange on November 16, 2016. ASE and SPIL submitted the required materials to the Ministry of Commerce of the People’s Republic of China (“MOFCOM”) on August 25, 2016 and are waiting for MOFCOM to formally accept the parties’ notification materials and start Phase I of the review process. In addition, the U.S. Federal Trade Commission (“FTC”) has issued a subpoena and civil investigative demand relating to the proposed combination. ASE and SPIL are fully cooperating with the investigation. There can be no assurance as to if and when regulatory approvals will be obtained in the PRC, or if and when the FTC will complete its investigation without seeking an injunction prohibiting the Share Exchange or as to the conditions or limitations that such regulatory authorities may seek to impose. See the section entitled “Special Factors — Regulatory Approvals Required to Complete the Share Exchange.”

 

Share Exchange Listing (see page 55)

 

It is expected that HoldCo Common Shares will be listed on the TWSE and HoldCo ADSs will be listed on the NYSE at the Effective Time of the Share Exchange. As a result of the Share Exchange, ASE Common Shares currently listed on the TWSE and ASE ADSs currently listed on the NYSE will cease to be listed on the TWSE and NYSE, respectively; SPIL Common Shares currently listed on the TWSE and SPIL ADSs currently listed on NASDAQ will ceased to be listed on the TWSE and NASDAQ, respectively.

 

The following is a tentative timetable of the various trading-related events in connection with the completion of the Share Exchange:

 

Final trading day for ASE Common Shares and SPIL Common Shares on the TWSE	[●], 2017 (Taiwan time)
Final trading day for ASE ADSs on the NYSE and SPIL ADSs on NASDAQ	[●], 2017 (New York time)
Effective date of the Share Exchange	[●], 2017 (Taiwan time)
First trading day for HoldCo Common Shares on the TWSE	[●], 2017 (Taiwan time)
First trading day for HoldCo ADSs on the NYSE	[●], 2017 (New York time)

 

 

In advance of completion of the Share Exchange, ASE expects to publicly announce the definitive timetable for these trading-related events.

 

Rights of Dissenting Shareholders (see page 56)

 

Under ROC law, ASE shareholders may have dissenters’ rights of appraisal in connection with the Share Exchange. See the section entitled “Special Factors — Rights of Dissenting Shareholders” for a complete discussion of dissenters’ rights. However, holders of ASE ADSs will not have any appraisal rights in respect of the Share

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Exchange under the terms of the ASE Deposit Agreement. ASE ADS holders who wish to be entitled to appraisal rights may cancel their ASE ADSs and become holders of ASE Common Shares by [DATE], 2017.

 

Litigation Related to the Share Exchange (see page 58)

 

ASE is not aware of any lawsuit that challenges the Share Exchange or any other transactions contemplated under the Joint Share Exchange Agreement.

 

Expenses Relating to the Share Exchange (see page 58)

 

All costs and expenses incurred in connection with the Share Exchange, the Joint Share Exchange Agreement and the completion of the transactions contemplated by the Joint Share Exchange Agreement will be paid by the party incurring such costs and expenses, except as otherwise explicitly provided for in the Joint Share Exchange Agreement, whether or not the Share Exchange or any of the other transactions contemplated by the Joint Share Exchange Agreement is completed.

 

Comparison of Rights of Shareholders of ASE and HoldCo (see page 58)

 

From a legal perspective, ASE shareholders receiving HoldCo Common Shares upon the completion of the Share Exchange will not have materially different rights from those they are entitled to as ASE shareholders. See the sections entitled “Special Factors — Comparison of Rights of Shareholders of ASE and HoldCo,” “Description of HoldCo American Depositary Shares,” and “Description of HoldCo Common Shares” for more information.

 

No Solicitation by SPIL of Acquisition Proposals (see page 79)

 

Under the terms of the Joint Share Exchange Agreement, SPIL agreed not to offer, agree, enter into or sign with any third party any contract, agreement or other arrangements in respect to certain alternative transactions, subject to certain exceptions as described in the section entitled “The Joint Share Exchange Agreement — Pre-Closing Covenants and Agreements.”

 

Conditions to Consummation of the Share Exchange (see page 81)

 

The obligations of ASE, SPIL and HoldCo to consummate the Share Exchange are subject to the satisfaction of the following conditions:

 

·

ASE and SPIL will each have obtained unconditional approval of the Share Exchange at their respective general shareholders’ meetings;

 

·

receipt of approvals from all relevant competent authorities, including, but not limited to, (i) the TWSE and the SEC (ii) the TFTC and MOFCOM and (iii) the FTC completing its investigation without seeking an injunction prohibiting the Share Exchange (in the case of (ii) and (iii), including approvals or consents of conditions imposed by such authorities that both ASE and SPIL have agreed to accept); and

 

·

no order (or agreement with the FTC) is in effect and enforceable prohibiting, enjoining or rendering illegal the consummation of the Share Exchange, and no law shall have been enacted or enforced after the date the Joint Share Exchange Agreement was executed rendering illegal or prohibiting the consummation of the Share Exchange; provided that the enforcement of an order or law shall not include the decision by a governmental entity to extend the waiting period or initiate an investigation under antitrust laws or other applicable law.

 

In addition, ASE’s and HoldCo’s obligations to consummate the Share Exchange are subject to the satisfaction or waiver by ASE and HoldCo of the following additional conditions:

 

·

all representations and warranties of SPIL are true and accurate as of the date the Joint Share Exchange Agreement was executed and as of the Effective Time, except to the extent that no material adverse effect on SPIL has occurred;

 

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·

SPIL has performed in all material respects all obligations and undertakings required to be performed by it under the Joint Share Exchange Agreement prior to the Effective Time;

 

·

no material adverse effect to SPIL shall have occurred prior to the Effective Time; and

 

·

prior to the Effective Time, no force majeure events will have occurred which, individually or in aggregate, result in a decrease in SPIL’s consolidated net book value by 30% or more, relative to SPIL’s net book value in its consolidated audited financial statements as of March 31, 2016.

 

In addition, SPIL’s obligation to consummate the Share Exchange is subject to the satisfaction or waiver of the following additional conditions:

 

·

all representations and warranties of ASE are true and accurate as of the date the Joint Share Exchange Agreement was executed and as of the Effective Time, except to the extent that no material adverse effect on ASE has occurred;

 

·

all representations and warranties of HoldCo are true and accurate as of the Effective Time, except to the extent that no material adverse effect on HoldCo has occurred;

 

·

ASE and HoldCo have performed in all material respects all obligations and undertakings required to be performed by each of them under the Joint Share Exchange Agreement prior to the Effective Time;

 

·

no material adverse effect to ASE will have occurred prior to the Effective Time; and

 

·

prior to the Effective Time, no force majeure events will have occurred which, individually or in aggregate, result in a decrease in ASE’s consolidated net book value by 30% or more, relative to ASE’s net book value in its consolidated audited financial statements as of March 31, 2016.

 

The consummation of the Share Exchange is subject to the satisfaction or waiver of all the conditions set forth above on or prior to December 31, 2017 (the “Long Stop Date”). If the closing of the Share Exchange cannot be completed due to the failure to satisfy the conditions set forth above on or prior to the Long Stop Date, the Joint Share Exchange Agreement will automatically terminate at midnight on the day immediately following the Long Stop Date.

 

ASE Board does not intend to waive (where capable of waiver by ASE) any of these or any other conditions unless it determines that the Share Exchange is in the best interest of ASE and ASE shareholders despite the condition(s) not being satisfied in whole or in part.

 

In addition, the expected timing for the completion of the Share Exchange may be impacted by other conditions described in this proxy statement/prospectus.

 

Termination of Joint Share Exchange Agreement (see page 82)

 

The Joint Share Exchange Agreement may be terminated prior to the Effective Time by either ASE or SPIL if any of the following occurs:

 

·

a law, judgment, court order or administrative decision issued by a competent authority restricts or prohibits the consummation of the Share Exchange, and such restriction or prohibition has been confirmed and cannot be remedied by amending the Joint Share Exchange Agreement; or

 

·

the Joint Share Exchange Agreement and Share Exchange are not approved by ASE’s shareholders or SPIL’s shareholders at their respective shareholder meetings.

 

The Joint Share Exchange Agreement may also be terminated at any time prior to the Effective Time by ASE if SPIL has breached or failed to perform any of its representations, warranties, undertakings or obligations under the Joint Share Exchange Agreement and such breach leads to the failure to satisfy the conditions to the consummation

10

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of the Share Exchange and is by its nature not capable of being cured, or is not cured by SPIL within 30 business days of receiving written notice of such breach, and is not waived in writing by ASE.

 

The Joint Share Exchange Agreement may also be terminated at any time prior to the Effective Time by SPIL if ASE has breached or failed to perform any of its representations, warranties, undertakings or obligations under the Joint Share Exchange Agreement and such breach leads to the failure to satisfy the conditions to the consummation of the Share Exchange and is by its nature not capable of being cured, or is not cured by ASE within 30 business days of receiving written notice of such breach, and is not waived in writing by SPIL.

 

If the Share Exchange is not consummated on or before the Long Stop Date, the Joint Share Exchange Agreement will automatically terminate at midnight on the day immediately following the Long Stop Date.

 

Termination Fees Relating to the Share Exchange (see page 79)

 

SPIL may be required to pay a termination fee of NT$17 billion (US$0.5 billion) if the Joint Share Exchange Agreement is terminated due to SPIL’s acceptance of a Superior Proposal (as defined in the Joint Share Exchange Agreement and further explained under the caption “The Joint Share Exchange Agreement — Pre-Closing Covenants and Agreements” beginning on page 79). See the section entitled “The Joint Share Exchange Agreement — Pre-Closing Covenants and Agreements” for a more complete description of the circumstances under which SPIL may be required to pay ASE a termination fee.

 

Remedies and Liquidated Damages (see page 82)

 

Upon the occurrence of certain prescribed material events of default, in addition to any right of termination and claims for expenses, the non-defaulting party will also be entitled to liquidated damages in the amount of NT$8.5 billion (US$0.3 billion) from the defaulting party, subject to adjustments for contributory negligence by the non-defaulting party. See the section entitled “The Joint Share Exchange Agreement — Termination and Events of Default” for a more complete description of the circumstances under which ASE or SPIL may be required to pay the other party liquidated damages.

 

Market Price Information (see page 68)

 

ASE Common Shares and SPIL Common Shares are listed on the TWSE under the stock code “2311” and “2325”, respectively. ASE ADSs and SPIL ADSs are listed on the NYSE and NASDAQ under the symbols “ASX” and “SPIL”, respectively. The following table presents the closing price information for ASE Common Shares, SPIL Common Shares, ASE ADSs and SPIL ADS on (a) May 25, 2016, the last trading day before the public announcement of the execution of the Joint Share Exchange MOU, and (b) November 21, 2016, the latest practicable trading day before the date of this proxy statement/prospectus.

 

	ASE Common Shares			SPIL Common Shares		ASE ADSs	SPIL ADSs
Date	NT$	US$	NT$		US$	US$	US$
May 25, 2016	33.05	1.06	50.50		1.61	4.89	7.52
November 21, 2016	34.80	1.11	47.70		1.53	5.41	7.40

 

Risk Factors

 

In determining whether to vote to approve the Share Exchange and the other transactions contemplated by the Joint Share Exchange Agreement, you should consider carefully the risk factors described in this document.

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Selected Consolidated Financial Data

 

Selected Consolidated Financial Data of ASE

 

The selected consolidated financial data of ASE as of and for the years ended December 31, 2012, 2013, 2014 and 2015 has been derived from ASE’s audited consolidated financial statements included in its annual report on Form 20-F for the year ended December 31, 2015 filed with the SEC on April 29, 2016 (“ASE 2015 20-F”), which is incorporated by reference into this proxy statement/prospectus. These consolidated financial statements were prepared based on IFRS. The selected consolidated financial data as of December 31, 2012 and 2013 and for the year ended December 31, 2012 is derived from ASE’s audited consolidated financial statements not included herein.

 

ASE first started preparing its audited consolidated financial statements in accordance with IFRS starting from January 1, 2013. Historical financial data as of and for the year ended December 31, 2011 derived from ASE’s consolidated financial statements prepared in accordance with accounting principles generally accepted in the ROC (“ROC GAAP”) with reconciliation to accounting principles generally accepted in the U.S. (“US GAAP”) has not been included below, as such information is not available on a basis that is consistent with the consolidated financial information for the years ended December 31, 2012, 2013, 2014 and 2015 and cannot be obtained without unreasonable effort or expense.

 

The information set forth below is only a summary and is not necessarily indicative of the results of future operations of ASE or HoldCo following completion of the Share Exchange, and you should read the following information together with ASE’s consolidated financial statements, the related notes, the section entitled “Item 5 —Operating and Financial Review and Prospects” contained in ASE 2015 20-F, which are incorporated by reference into this proxy statement/prospectus. For more information, see the section entitled “Where You Can Find More Information.”

 

The selected historical consolidated statement of operations data for each of the nine-month periods ended September 30, 2015 and 2016 and the consolidated balance sheet data as of December 31, 2015 and September 30, 2016 have been derived from ASE’s unaudited consolidated financial statements for the nine-month period ended September 30, 2016 contained in ASE’s interim report on Form 6-K furnished with the SEC on November 22, 2016, which is incorporated by reference into this proxy statement/prospectus.

 

In September 2015, March and April 2016, ASE successively acquired Common Shares and ADSs of SPIL for cash resulting in ASE’s total ownership of 33.29% of SPIL which was reflected as investments accounted for using the equity method on the consolidated balance sheets as of December 31, 2015 and September 30, 2016. As of September 30, 2016, ASE has completed the identification of the difference between the cost of the investment and ASE’s share of the net fair value of SPIL’s identifiable assets and liabilities. Therefore, according to IFRS, ASE has retrospectively adjusted the comparative financial statements for prior periods. The retrospective adjustments are a decrease of NT$281.4 million to the investments accounted for using the equity method on the consolidated balance sheet as of December 31, 2015 and share of profit of associates on the consolidated statement of comprehensive income for the year ended December 31, 2015. The impact of such adjustments represent a 0.08% decrease to the total assets and 1.34% decrease to the total profit for the year. ASE considered such retrospective adjustments to be immaterial from both quantitative and qualitative perspectives. The balance sheet data as of December 31, 2015 in the following table marked as “Adjusted” reflected the impact from the retrospective adjustments.

 

		For the Year Ended December 31,																				For the Nine Months Ended September 30,
IFRS		2012				2013				2014				2015				2015				2015				2016
		NT$				NT$				NT$				NT$				US$				NT$				NT$				US$
		(in millions, except earnings per ASE Common Share and per ASE ADS data)
Statement of Comprehensive Income Data:
Operating revenues			193,972.4				219,862.4				256,591.4				283,302.5				9,059.9				207,754.4				197,755.5				6,324.1
Operating costs			(157,342.7	)			(177,040.4	)			(203,002.9	)			(233,167.3	)			(7,456.6	)			(170,888.0	)			(159,938.4	)			(5,114.8	)
Gross profit			36,629.7				42,822.0				53,588.5				50,135.2				1,603.3				36,866.4				37,817.1				1,209.3
Operating expenses			(18,922.6	)			(20,760.4	)			(23,942.7	)			(25,250.6	)			(807.5	)			(18,782.8	)			(19,241.5	)			(615.3	)

 

 

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		For the Year Ended December 31,																				For the Nine Months Ended September 30,
IFRS		2012				2013				2014				2015				2015				2015				2016
		NT$				NT$				NT$				NT$				US$				NT$				NT$				US$
		(in millions, except earnings per ASE Common Share and per ASE ADS data)
Other operating income and expenses, net			83.2				(1,348.2	)			228.7				(251.5	)			(8.0	)			(71.6	)			(704.3	)			(22.5	)
Profit from operations			17,790.3				20,713.4				29,874.5				24,633.1				787.8				18,012.0				17,871.3				571.5
Non-operating income (expense), net			(1,181.6	)			(1,343.6	)			(1,339.4	)			660.1				21.1				712.9				578.2				18.5
Profit before income tax			16,608.7				19,369.8				28,535.1				25,293.2				808.9				18,724.9				18,449.5				590.0
Income tax expense			(2,960.4	)			(3,499.6	)			(5,666.0	)			(4,311.1	)			(137.9	)			(2,575.9	)			(3,230.0	)			(103.3	)
Profit for the year			13,648.3				15,870.2				22,869.1				20,982.1				671.0				16,149.0				15,219.5				486.7
Attributable to
Owners of the Company			13,191.6				15,404.5				22,228.6				20,013.5				640.0				15,506.0				14,369.7				459.5
Non-controlling interests			456.7				465.7				640.5				968.6				31.0				643.0				849.8				27.2
			13,648.3				15,870.2				22,869.1				20,982.1				671.0				16,149.0				15,219.5				486.7
Other comprehensive income (loss), net of income tax			(3,830.7	)			3,233.3				5,504.4				(147.6	)			(4.7	)			1,284.4				(7,331.5	)			(234.4	)
Total comprehensive income for the year			9,817.6				19,103.5				28,373.5				20,834.5				666.3				17,433.4				7,888.0				252.3
Attributable to
Owners of the Company			9,420.4				18,509.6				27,394.3				19,940.4				637.7				16,679.4				7,632.6				244.1
Non-controlling interests			397.2				593.9				979.2				894.1				28.6				754.0				255.4				8.2
			9,817.6				19,103.5				28,373.5				20,834.5				666.3				17,433.4				7,888.0				252.3
Earnings per common share (1) :
Basic			1.77				2.05				2.89				2.62				0.08				2.03				1.88				0.06
Diluted			1.73				1.99				2.79				2.51				0.08				1.88				1.58				0.05
Dividends per common share (2)			2.05				1.05				1.29				2.00				0.06				2.00				1.60				0.05
Earnings per equivalent ADS (1) :
Basic			8.86				10.26				14.46				13.08				0.42				10.13				9.38				0.30
Diluted			8.65				9.96				13.93				12.55				0.40				9.42				7.90				0.25
Number of common shares (3) :
Basic			7,445.5				7,508.5				7,687.9				7,652.8				7,652.8				7,656.4				7,658.5				7,658.5
Diluted			7,568.2				7,747.6				8,220.7				8,250.1				8,250.1				8,241.0				8,272.9				8,272.9
Number of equivalent ADSs
Basic			1,489.1				1,501.7				1,537.6				1,530.6				1,530.6				1,531.3				1,531.7				1,531.7
Diluted			1,513.6				1,549.5				1,644.1				1,650.0				1,650.0				1,648.2				1,654.6				1,654.6

________________________

Notes:

	(1)	The denominators for diluted earnings per ASE Common Share and diluted earnings per equivalent ASE ADS are calculated to account for the potential diluted factors, such as the exercise of options and conversion of ASE’s convertible bonds into ASE Common Shares.
	(2)	Dividends per ASE Common Share issued as a cash dividend, a stock dividend and distribution from capital surplus.
	(3)	Represents the weighted average number of shares after retroactive adjustments to give effect to stock dividends. ASE Common Shares held by consolidated subsidiaries are classified as “treasury stock,” and are deducted from the number of ASE Common Shares outstanding.

 

		As of December 31,																								As of September 30,
IFRS		2012				2013				2014				2015								2015 (Adjusted)				2016
		NT$				NT$				NT$				NT$				US$				NT$				NT$				US$
		(in millions)
Balance Sheet Data:
Current assets			97,495.6				132,176.5				159,955.2				156,732.8				5,012.3				156,732.8				143,369.2				4,584.9
Investments - non-current (1)			2,267.8				2,345.5				2,409.3				38,328.0				1,225.7				38,046.6				50,677.6				1,620.6
Property, plant and equipment, net			127,197.8				131,497.3				151,587.1				149,997.1				4,796.8				149,997.1				145,208.9				4,643.7
Intangible assets			12,361.3				11,953.6				11,913.3				11,888.6				380.2				11,888.6				12,217.1				390.7
Long-term prepayment for lease			4,164.1				4,072.3				2,586.0				2,556.2				81.7				2,556.2				2,382.4				76.2
Others (2)			4,236.0				4,676.9				5,267.9				5,765.5				184.4				5,765.6				6,830.7				218.5
Total assets			247,722.6				286,722.1				333,718.8				365,268.2				11,681.1				364,986.9				360,685.9				11,534.6
Short-term debts (3)			36,884.9				44,618.2				41,176.0				36,983.4				1,182.7				36,983.4				33,007.5				1,055.6
Current portion of long-term debts			3,213.8				6,016.5				2,835.5				16,843.3				538.6				16,843.3				15,657.7				500.7
Long-term debts (4)			44,591.7				50,166.5				55,375.8				66,535.1				2,127.8				66,535.1				70,812.9				2,264.6
Other liabilities (5)			53,211.8				60,176.9				78,640.1				78,700.1				2,516.8				78,700.1				81,539.6				2,607.6
Total liabilities			137,902.2				160,978.1				178,027.4				199,061.9				6,365.9				199,061.9				201,017.7				6,428.5
Share capital			76,047.7				78,180.3				78,715.2				79,185.7				2,532.3				79,185.7				79,509.1				2,542.7
Non-controlling interests			3,505.7				4,128.4				8,209.9				11,492.5				367.5				11,492.6				11,057.6				353.6

 

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		As of December 31,																								As of September 30,
IFRS		2012				2013				2014				2015								2015 (Adjusted)				2016
		NT$				NT$				NT$				NT$				US$				NT$				NT$				US$
		(in millions)
Equity attributable to owners of the Company			106,314.7				121,615.6				147,481.5				154,713.8				4,947.7				154,432.4				148,610.6				4,752.5

  

________________________

Notes:

(1)

Including available-for-sale financial assets — non-current and investments accounted for using the equity method.

(2)

Including deferred tax assets, other financial assets — non-current and other non-current assets.

(3)

Including short-term bank loans and short-term bills payable.

(4)

Including bonds payable, long-term borrowings (consisting of bank loans and bills payable) and capital lease obligations.

(5)

Including (x) current liabilities other than short-term debts and current portion of long-term debts and (y) non-current liabilities other than long-term debts. For

 

 

		For the Year Ended December 31,																				For the Nine Months Ended   September 30,
IFRS		2012				2013				2014				2015				2015				2015				2016
		NT$				NT$				NT$				NT$				US$				NT$				NT$				US$
		(in millions)
Cash Flow Data:
Capital expenditures			(39,029.5	)			(29,142.7	)			(39,599.0	)			(30,280.1	)			(968.3	)			(24,695.3	)			(20,391.1	)			(652.1	)
Depreciation and amortization			23,435.9				25,470.9				26,350.8				29,518.7				944.0				22,172.2				22,038.6				704.8
Net cash inflow from operating activities			33,038.0				41,296.0				45,863.5				57,548.3				1,840.4				34,303.8				36,712.1				1,174.0
Net cash outflow from investing activities			(43,817.8	)			(29,925.8	)			(38,817.9	)			(63,351.4	)			(2,025.9	)			(57,691.9	)			(37,137.2	)			(1,187.6	)
Net cash inflow (outflow) from financing activities			8,455.8				12,794.9				(2,797.0	)			8,636.3				276.2				12,187.3				(11,839.8	)			(378.6	)

 

Selected Consolidated Financial Data of SPIL

 

The following sets forth summary historical consolidated financial information of SPIL for each of the four years ended December 31, 2012, 2013, 2014 and 2015 and for each of the nine-month periods ended September 30, 2015 and 2016. The selected consolidated financial data of SPIL as of December 31, 2015 and 2014 and for the three year ended December 31, 2015 has been derived from SPIL’s audited consolidated financial statements, included in its annual report on Form 20-F for the year ended December 31, 2015 filed with the SEC, which is incorporated by reference into this registration statement. The selected consolidated financial data as of December 31, 2012 and 2013 and for the year ended December 31, 2012 is derived from SPIL’s audited consolidated financial statements not included or incorporated herein. The selected historical consolidated statement of operations data for each of the nine-month periods ended September 30, 2016 and 2015 and the consolidated balance sheet data as of September 2016 have been derived from SPIL’s unaudited consolidated financial statements for the quarterly period ended September 30, 2016 contained in SPIL’s interim report on Form 6-K furnished with the SEC on November 22, 2016, which is incorporated by reference into this registration statement. Pursuant to the transitional relief granted by the SEC in respect of the first-time application of IFRS, financial and operating data as of and for the year ended December 31, 2011 derived from SPIL’s consolidated financial statements prepared in accordance with U.S. GAAP have not been included below. The information set forth below is not necessarily indicative of future results and should be read in conjunction with “Item 5. Operating and Financial Review and Prospects” and the consolidated financial statements, related notes and other financial information included in the SPIL’s Annual Report on Form 20-F for the year ended December 31, 2015 (“SPIL 2015 20-F”), which are incorporated into this proxy statement/prospectus by reference. For more information, see the section entitled “Where You Can Find More Information.”

 

SPIL first started preparing its audited consolidated financial statements in accordance with IFRS starting from January 1, 2013. Historical financial data as of and for the years ended December 31, 2011 derived from SPIL’s consolidated financial statements prepared in accordance with ROC GAAP with reconciliation to US GAAP has not been included below, as such information is not available on a basis that is consistent with the consolidated financial information for the years ended December 31, 2012, 2013, 2014 and 2015 and cannot be obtained without unreasonable effort or expense.

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The historical financial information as of September 30, 2016 and for each of the nine-month periods ended September 30, 2015 and 2016 has been derived from SPIL’s unaudited consolidated financial statements, prepared in accordance with IFRS and contained in SPIL’s interim report on Form 6-K furnished with the SEC on November 22, 2016, which is incorporated into this proxy statement/prospectus by reference.

 

		For the Year Ended December 31,																				For the Nine Months Ended September 30,
IFRS		2012								2014				2015								2015				2016
		NT$				NT$				NT$				NT$				US$				NT$				NT$				US$
		(in millions, except earnings per SPIL Common Share and per SPIL ADS data)
Statement of Comprehensive Income Data:
Operating revenues			64,654.6				69,356.2				83,071.4				82,839.9				2,649.2				62,075.0				62,934.4				2,012.6
Operating costs			(52,915.6	)			(54,925.7	)			(62,081.3	)			(61,230.6	)			(1,958.1	)			(45,908.0	)			(48,812.5	)			(1,561.0	)
Gross profit			11,739.0				14,430.5				20,990.1				21,609.3				691.1				16,167.0				14,121.9				451.6
Operating expenses			(5,351.2	)			(7,391.6	)			(7,169.0	)			(8,354.8	)			(267.2	)			(6,173.3	)			(6,377.4	)			(203.9	)
Other operating income and expenses, net			4.6				61.2				284.3				(255.8	)			(8.2	)			(253.7	)			(184.9	)			(5.9	)
Profit from operations			6,392.4				7,100.1				14,105.4				12,998.7				415.7				9,740.0				7,559.6				241.8
Non-operating income (expense), net			399.5				348.6				162.8				(2,621.2	)			(83.8	)			657.0				732.8				23.4
Profit before income tax			6,791.9				7,448.7				14,268.2				10,377.5				331.9				10,397.0				8,292.4				265.2
Income tax expense			(1,229.7	)			(1,606.7	)			(3,050.1	)			(1,366.0	)			(43.7	)			(1,180.7	)			(1,038.9	)			(33.2	)
Profit for the year			5,562.2				5,842.0				11,218.1				9,011.5				288.2				9,216.3				7,253.5				232.0
Attributable to
Owners of the Company			5,562.2				5,842.0				11,218.1				9,011.5				288.2				9.216.3				7.253.5				232.0
Non-controlling interests			–				–				–				–				–				–				–				–
			5,562.2				5,842.0				11,218.1				9,011.5				288.2				9.216.3				7.253.5				232.0
Other comprehensive income (loss), net of income tax			(223.3	)			1,058.9				3,293.4				(906.8	)			(29.0	)			(2,330.7	)			(1,518.5	)			(48.6	)
Total comprehensive income for the year			5,338.9				6,900.9				14,511.5				8,104.7				259.2				6,885.6				5,735.0				183.4
Attributable to
Owners of the Company			5,338.9				6,900.9				14,511.5				8,104.7				259.2				6,885.6				5,735.0				183.4
Non-controlling interests			–				–				–				–				–				–				–				–
			5,338.9				6,900.9				14,511.5				8,104.7				259.2				6,885.6				5,735.0				183.4
Earnings per common share (1) :
Basic			1.81				1.89				3.60				2.89				0.09				2.96				2.33				0.07
Diluted			1.80				1.87				3.57				2.86				0.09				2.70				1.84				0.06
Dividends per common share (2)			1.67				1.80				3.00				3.80				0.12				–				–				–
Earnings per equivalent ADS (1) :
Basic			9.03				9.43				18.00				14.46				0.46				14.80				11.65				0.37
Diluted			8.99				9.37				17.87				14.30				0.46				13.50				9.20				0.29
Number of common shares:
Basic			3,078.3				3,098.2				3,116.4				3,116.4				3,116.4				3,116.4				3,116.4				3,116.4
Diluted			3,094.2				3,116.6				3,139.5				3,150.1				3,150.1				3,407.3				3,403.9				3,403.9
Number of equivalent ADSs
Basic			615.7				619.6				623.3				623.3				623.3				623.3				623.3				623.3
Diluted			618.8				623.3				627.9				630.0				630.0				681.4				680.8				680.8

 

Notes:

(1)

The denominators for diluted earnings per SPIL Common Share and diluted earnings per equivalent SPIL ADS are calculated to account for the potential diluted factors, such as conversion of SPIL’s convertible bonds into SPIL Common Shares.

(2)

Dividends per SPIL Common Share issued as a cash dividend and distribution from capital surplus.

 

 

		As of December 31,																				As of September 30,
IFRS		2012				2013				2014				2015								2016				2016
		NT$				NT$				NT$				NT$				US$				NT$				US$
		(in millions)
Balance Sheet Data:
Current assets			33,445.6				37,825.1				55,207.9				48,785.2				1,560.1				44,914.8				1,436.4
Investments - non-current (1)			6,068.1				6,703.0				9,076.3				8,049.1				257.4				7,028.9				224.8
Property, plant and equipment, net			49,927.4				55,196.8				63,520.7				64,305.6				2,056.5				66,331.5				2,121.2
Intangible assets			516.1				355.3				249.2				192.8				6.2				181.0				5.8
Long-term prepayment for lease			–				–				–				–				–				–				–

 

 

15

Table of Contents  

  

		As of December 31,																				As of September 30,
IFRS		2012				2013				2014				2015								2016				2016
		NT$				NT$				NT$				NT$				US$				NT$				US$
		(in millions)
Others (2)			1,895.5				1,738.7				1,698.4				1,876.5				60.0				1,737.1				55.5
Total assets			91,852.7				101,818.9				129,752.5				123,209.2				3,940.2				120,193.3				3,843.7
Short-term debts (3)			2,468.4				2,533.9				2,690.3				2,790.1				89.2				2,665.6				85.2
Current portion of long-term debts			3,148.6				3,154.2				6,970.1				5,991.1				191.6				4,972.7				159.0
Long-term debts (4)			12,038.2				15,355.6				24,669.5				20,485.3				655.1				24,044.8				768.9
Other liabilities (5)			15,279.4				18,903.5				24,648.8				24,413.5				780.8				25,088.2				802.4
Total liabilities			32,934.6				39,947.2				58,978.7				53,680.0				1,716.7				56,771.3				1,815.5
Share capital			31,163.6				31,163.6				31,163.6				31,163.6				996.6				31,163.6				996.6
Non-controlling interests			–				–				–				–				–				–				–
Equity attributable to owners of the Company			58,918.1				61,871.7				70,773.8				69,529.2				2,223.5				63,422.0				2,028.2

_____________________

Notes: 

(1)

Including available-for-sale financial assets — non-current and investments accounted for using the equity method.

(2)

Including deferred tax assets, other financial assets — non-current and other non-current assets.

(3)

Including short-term bank loans and short-term bills payable.

(4)

Including convertible bonds and long-term loans

(5)

Including current liabilities other than short-term debts and current portion of long-term debts, non-current liabilities other than longterm debts and current income tax liabilities.

 

		For the Year Ended   December 31,																				For the Nine Months Ended   September 30,
IFRS		2012								2014				2015								2015				2016
		NT$				NT$				NT$				NT$				US$				NT$				NT$				US$
		(in millions)
Cash Flow Data:
Capital expenditures			(15,142.3	)			(14,978.7	)			(19,560.7	)			(13,855.4	)			(443.1	)			(10,785.1	)			(11,858.8	)			(379.2	)
Depreciation and amortization			10,100.4				11,033.7				12,435.8				13,513.9				432.2				10,144.7				9,939.1				317.8
Net cash inflow from operating activities			13,366.1				17,747.9				24,945.2				26,784.2				856.6				19,434.7				13,668.7				437.1
Net cash outflow from investing activities			(15,872.4	)			(15,588.3	)			(19,243.8	)			(16,587.4	)			(530.5	)			(11,077.6	)			(10,607.1	)			(339.2	)
Net cash inflow (outflow) from financing activities			2,520.1				(1,150.3	)			7,292.2				(15,096.3	)			(482.8	)			(16,087.2	)			(8,751.1	)			(279.9	)

 

Ratio of Earnings to Fixed Charges of SPIL

		Year Ended December 31,																Nine Months Ended September 30,
		2012				2013				2014				2015				2015				2016
Ratio of earnings to fixed charges (1)			25.27				18.62				24.70				15.49				19.68				15.36

___________________

Note:

(1)

For purposes of calculating the ratio of earnings to fixed charges, earnings consist of income before income tax expenses from continuing operations before adjustment for equity in losses of affiliated companies adding fixed charges and subtracting preference security dividend requirements of consolidated subsidiaries. Fixed charges consist of interest expensed, amortized discounts related to indebtedness, an estimate of the interest within rental expense and preference security dividend requirements of consolidated subsidiaries.