Filer: Vishay Intertechnology, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: General Semiconductor Inc.
Commission File No. 001-05442
Contact: Richard N. Grubb, Executive
Vice President and Chief
Financial Officer or
Robert A. Freece
Senior Vice President
610/644-1300
Vishay Critical of General Semiconductor's
Response to Proposed Business Combination
MALVERN, Pennsylvania - April 24, 2001- Vishay Intertechnology, Inc. (NYSE: VSH)
announced today that in a letter to the Board of Directors of General
Semiconductor (NYSE: SEM), Dr. Felix Zandman, Chairman of the Board and C.E.O.
of Vishay, expressed disappointment with General Semiconductor's rejection last
week of Vishay's proposal for a business combination of the two companies. Under
the Vishay proposal, first disclosed on April 2, 2001, Vishay would acquire
General Semiconductor through a tax free stock-for-stock transaction, in which
the stockholders of General Semiconductor would receive one Vishay share for
every two General Semiconductor shares.
The text of Dr. Zandman's letter to the Board of Directors of General
Semiconductor follows:
"I was very disappointed to receive your response to my letter of April 2, 2001,
in which I proposed a business combination of our two companies. Vishay has
proposed, subject to due diligence and other standard conditions, to acquire
General Semiconductor through a tax free stock-for-stock transaction, in which
the stockholders of General Semiconductor would receive one Vishay share for
every two General Semiconductor shares. Based upon the relationship between the
stock prices of our two companies since we first announced our proposal, we
believe that the market is receptive to this proposed business combination and
that it should be vigorously pursued.
"As I stated in my letter, we are prepared to meet at any time with you and your
management to discuss our proposal and to explain why we believe that the
transaction is in the best interests of General Semiconductor, Vishay, our
respective stockholders and our other constituencies. Frankly, I do not
understand how you can reject our proposal without having had any serious
contacts with us, without any substantive discussion and without negotiation. I
fail to see how such inaction is consistent with your fiduciary duties to
General Semiconductor and its stockholders, let alone how you can dismiss our
offer as not being in the best interests of stockholders.
"Let me emphasize again why we believe a business combination between Vishay and
General Semiconductor makes so much sense.
o Our product offerings are complementary. Combining the two will create the
premier line of discrete electronic components, from passives devices to
signal processing circuits to power regulators and voltage rectifiers.
o In combination with Vishay, General Semiconductor will be able to pursue
product development in emerging MOSFET technologies. As we have indicated to
you, our tests have shown that General Semiconductor's trench MOSFET
products are currently infringing on the patented technology of our
subsidiary. Our subsidiary does not intend to ignore such infringement, and
will take all required action to protect this important intellectual
property asset.
o The market for electronic components has softened, as evidenced by first
quarter results across our industry. To maintain and enhance stockholder
value in these uncertain times requires a renewed focus on cost-cutting,
operational efficiencies and product synergies. The combination of our
operations will provide opportunities for achieving these objectives that
are not available to General Semiconductor on a stand-alone basis.
o Vishay has a strong balance sheet with a net cash position, notwithstanding
the current industry slowdown. This balance sheet will enable the combined
company to pursue opportunistic acquisitions and capital expansion that are
likely foreclosed to General Semiconductor in its weaker financial
circumstances.
"We believe that there is strong stockholder support for a proposal to combine
our companies. We are confident that General Semiconductor stockholders want
their board to seriously consider our proposal, with diligence that must include
in-depth discussions and negotiations between our two companies.
"I again invite you promptly to arrange a meeting with us to explore the merits
of our proposal. But if this board is unwilling to do so, then allow
stockholders the opportunity to elect one that will. As a stockholder of General
Semiconductor, we are prepared to propose an alternative slate of directors at
the company's upcoming annual meeting that will be committed to a fair and
thorough evaluation of our proposal consistent with the directors' fiduciary
duties. The by-laws that you have adopted preclude us from presenting our slate
at the meeting. But you can amend those by-laws now, adjourn the meeting to
allow for adequate circulation of our materials and let the stockholders decide.
"I look forward to hearing from you.
Very truly yours,
Dr. Felix Zandman
Chairman and Chief Executive
Officer"
Vishay, a Fortune 1,000 Company with annual sales of $2.5 billion, is the
largest U.S. and European manufacturer of passive electronic components
(resistors, capacitors, inductors) and a major producer of discrete
semiconductors (diodes, optoelectronics, transistors), IRDCs (infrared
communication devices), and power and analog switching integrated circuits. The
Company's components are vital to electronic operations and can be found in
products manufactured in a very broad range of industries worldwide. With
headquarters in Malvern, Pennsylvania, Vishay employs over 20,000 people in 60
plants in the U.S., Mexico, Germany, Austria, the United Kingdom, France,
Portugal, the Czech Republic, Hungary, Israel, Taiwan (ROC), China and the
Philippines. Vishay can be found on the Internet at http://www.vishay.com
Statements contained herein that relate to Vishay's future performance,
including, without limitation, statements of the expected benefits of the
business combination with General Semiconductor, are forward-looking statements
within safe harbor provisions of the Private Securities Litigation Reform Act of
1995. Such statements are based on current expectations only, and are subject to
certain risks, uncertainties and assumptions. Should one or more of these risks
or uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those anticipated, estimated or
projected. Among the factors that could cause actual results to materially
differ include: changes in the demand for, or in the mix of the Company's
products and services; recessionary trends in general or in the specific areas
where the Company sells the bulk of its products; competitive pricing and other
competitive pressures; cancellation of a material portion of the orders in the
Company's backlog; difficulties in expansion and/or new product development,
including capacity constraints and skilled personnel shortages; drops in average
sales prices; changes in laws, including trade restrictions or prohibitions and
the cancellation or reduction of government grants, tax benefits or other
incentives; currency exchange rate fluctuations; labor unrest or strikes;
underutilization of plants and factories in high labor cost regions and capacity
constraints in low labor cost regions; difficulties in obtaining items needed
for the production of the Company's products; quality deviations in raw
materials; significant price increases in, or the inability to obtain adequate
supplies of, tantalum or palladium; the availability of acquisition
opportunities on terms considered reasonable by the Company; and such other
factors affecting the Company's operations, markets, products, services and
prices as are set forth in its December 31, 2000 Report on Form 10-K filed with
the Securities and Exchange Commission. The Company undertakes no obligation to
publicly update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.
The foregoing is a proposal which has not been agreed to by General
Semiconductor and is subject to diligence and other customary conditions. If
Vishay proceeds with the proposed transaction, it will file appropriate
disclosure materials with the Securities and Exchange Commission. General
Semiconductor may also be required to file documentation with the SEC. Investors
and security holders are advised to read this documentation, when and if it
becomes available, because this documentation will contain important
information. Investors and security holders may obtain a free copy of this
documentation (when and if available) and other documents filed by Vishay and
General Semiconductor with the SEC at the SEC's website at www.sec.gov. The
transaction documentation, if and when it is filed, and other documents of
Vishay may also be obtained from Vishay upon request by directing such request
to Vishay Intertechnology, Inc., 63 Lincoln Highway, Malvern, Pennsylvania
19355-2121, tel.: (610) 644-1300, Attention: Corporate Secretary.
# # #