(Yicai Global) March 31 -- Chinese private equity fund Wise Road Capital’s proposed USD1.4 billion acquisition of South Korea’s Magnachip Semiconductor, the world’s second largest producer of display driver integrated circuits for organic light-emitting diodes, has been thrown into doubt after South Korean regulators said they would investigate whether the sale includes any core national technologies.

The South Korean government is likely to "put the brakes on Wise Road’s takeover" if any core national technologies are found to be involved, Business Korea reported today.

Wise Road is paying USD29 a share, a 75 percent premium on the chipmaker’s average share price over the last three months, China Securities Journal reported yesterday. The deal is expected to be completed before the end of the year, it added.

The management and employees of Seoul-based Magnachip, which spun-off from South Korean semiconductor giant SK Hynix in 2004, will remain in place, the China Securities report said.

“This transaction is in the best interests of all of our stakeholders, including shareholders, customers and employees,” said Chief Executive Officer Kim Young-Joon. It will also be an excellent opportunity for growth, he added.

Beijing-based Wise Road is also the owner of Dutch chipmaker Nexperia and Swiss high-end core component manufacturer Huba Control.

Magnachip’s share price [NYSE:MX] closed down 2.68 percent yesterday at USD25.09 apiece.

Editor: Kim Taylor