ChipMOS Technologies (Bermuda) has announced plans to merge with its 58.3%-owned subsidiary ChipMOS Technologies (ChipMOS Taiwan), with ChipMOS Taiwan to be the surviving company.

The planned merger has been approved by the board of directors of both ChipMOS (Bermuda) and ChipMOS Taiwan.

Under the agreement, ChipMOS shareholders will receive US$3.71 in cash, without interest, and 0.9355 American depository shares representing 18.71 shares of ChipMOS Taiwan in exchange for each ChipMOS common share of par value US$0.04 currently held. This would represent US$19.77 in total consideration as of January 20, 2016 and a premium of 14.7%.

The board of directors of ChipMOS Taiwan has also approved the establishment of a new US American depositary receipt program to facilitate the merger and to foster ongoing market liquidity of its shares.

"The proposed corporate restructuring is an important milestone for us," said SJ Cheng, chairman and CEO of ChipMOS and ChipMOS Taiwan. "The completion of the merger will allow us to more efficiently operate as a singular entity and brand, placing ChipMOS in an even stronger position for future growth and development."

The merger is currently expected to close in the third quarter of 2016.