Taiwanese company WT Microelectronics has signed a definitive agreement to buy 100% stake in Future Electronics in an all-cash deal valued at $3.8bn (C$5.13bn).

Based in Canada, privately-owned Future Electronics is engaged in distribution of electronic components around the globe.

Future Electronics, which operates in 47 countries and has a team of 5,200, generated $2.9bn in revenue in the first six months of 2023.

WT noted that the merged business will offer cross-border services to clients all over the world.

It will offer geographic expansion as WT does not have operations in the Americas and EMEA.

The purchase is also expected to bolster the merged business’s capabilities in supply chain solutions through a distinct and complete product line, expanded client coverage, and combined intelligence about market.

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Furthermore, the deal is anticipated to enhance WT’s long-term financial position through increased operating margins, diversified product lines, and an improved geographic presence.

WT plans to use a combination of cash on hand and loan financing from DBS Bank to pay for the purchase.

WT Microelectronics chairman and CEO Eric Cheng said: “Future Electronics has an experienced and deep management team and a very talented employee base, and is highly complementary to WT Microelectronics in terms of product offerings, customer coverage, and global footprint.

“Future’s management team, all of their employees worldwide, and all locations and distribution centers will continue to operate and add value to the organisation.”

Future Electronics president, CEO and chairman Omar Baig said: “This combination is a great opportunity for WT Microelectronics and Future Electronics to jointly form a world-class industry leader, and allows us to continue our long-term strategic plan to offer the highest level of services to our customers, which we have been doing for the past 55 years.”

Subject to receipt of regulatory approvals and other closing conditions, the transaction is expected to complete in the first half of 2024.