(Yicai) Sept. 15 -- WT Microelectronics, Asia's second largest distributor of electronic components, said it will acquire Canada's Future Electronics for USD3.8 billion.

WT's own funds and a loan from Singapore's DBS Bank will finance the acquisition, the Taiwan-based firm said yesterday, adding that the deal is expected to close in the first half of next year.

There had been speculation about a potential takeover of Future Electronics for some time, but no deal had transpired until now due to financial and price issues, according to analysts. Its acquisition was precipitated by the end of the semiconductor boom and higher device inventories, US interest rates, interest expenses, and financial pressures since the second half of last year, they said.

Future Electronics very much complements WT in terms of product offering, client coverage, and global layout, according to WT Chairman and CEO Cheng Jiaqiang. Mergers and acquisitions can improve supply chain resiliency, he added.

WT acquired Singapore-based electronic components distributor Excelpoint Technology for about SGD232 million (USD170.3 million) in the first half of last year.

Future Electronics was set up in 1968 and operates in 47 countries, employing 5,200 people. It had net profit of USD184 million and revenue of USD2.9 billion in the six months ended June 30.

The Montral-based company’s management team, staff, offices, and distribution centers will continue to work as normal, WT said. Omar Baig, the firm’s president, chief executive officer, and chairman, will join WT's board when the deal is completed.

WT ranked fourth and Future Electronics seventh in US research and advisory firm Gartner's 2019 global semiconductor channel sales revenue list.

Founded in 1993, WT is the agent of more than 80 chipmakers worldwide, with their products used in telecoms gear, consumer electronics, the Internet of Things, industrial controllers, and autos. It had a first-half net profit of NTD1.7 billion (USD53 million) on revenue of NTD237.6 billion (USD7.4 billion).

Editor: Martin Kadiev