A Canyon Bridge Imagination merger is now on the cards. A final block to this purchase of Imagination Technologies by Canyon Bridge is now about to be removed.
We recently published a news report that Canyon Bridge was to purchase UK chip company, Imagination Technologies. This was after Apple informed Imagination that its services as a chip supplier would no longer be required. However, it is a bone of contention between the two companies whether or not Apple can develop its own chips. Furthermore, Imagination Technologies maintain that this may breach Imagination’s intellectual rights.
Apply pays royalties to Imagination for the chips it used in its iPads, iPods and iPhone. These payments amount to around 50% of Imagination Technology’s income. Apparently, Apple maintains it can make and design such chips themselves without any intellectual right infringements.
That issue may have to go to the courts before it is resolved. Apple may be in difficulty if it is decided Imagination’s way. However, that apart, Canyon Bridge had previously tried to purchase a US company that designed and manufactured chips. Lattice Semiconductor was in the sights of the Chinese company until President Donald Trump’s administration barred it. The reason given for this was national security.
It was after the failure of this $1.3 billion bid for Lattice Semiconductor that the Chinese firm set its eyes on Imagination. The £550 million ($742 million) deal has yet to be finalized. For the deal to be completed, Imagination has to sell Mips, an American chip designer it purchased in 2013.
The reason for this being necessary is that otherwise the Imagination takeover would have to be reviewed in the US. The review body would be the Committee on Foreign Investment in the United States. This is the same body that barred Canyon Bridge from purchasing Lattice Semiconductor.
Once Mips has been sold, the Chinese firm would have no connection with any US company, and US regulators cannot block the purchase of Imagination Technologies. Its acquisition by Canyon Bridge would ensure the future of Imagination without Apple. As a result, it would remain based in the UK but would operate worldwide.
Because of this, Imagination Technologies plans to sell Mips to an investment firm, Tallwood Venture Capital. This company runs both California and Chinese offices. The agreed selling price is to be around $65 million. Condeqtently, the Canyon Bridge – Imagination merger would take place without US involvement. There seems to be no other hurdle to Canyon Bridge Imagination Merger.