Vishay Critical of General Semiconductor's Response to Proposed Business Combination

Apr 24, 2001, 01:00 ET from Vishay Intertechnology, Inc.

    MALVERN, Pa., April 24 /PRNewswire Interactive News Release/ -- 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.
 
      -- 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.
 
      -- 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.
 
      -- 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.
 
      -- 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.
 
     CONTACT:  Richard N. Grubb, Executive Vice President and Chief Financial
 Officer or Robert A. Freece, Senior Vice President, 610-644-1300, both of
 Vishay.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X85747177
 
 

SOURCE Vishay Intertechnology, Inc.
    MALVERN, Pa., April 24 /PRNewswire Interactive News Release/ -- 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.
 
      -- 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.
 
      -- 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.
 
      -- 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.
 
      -- 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.
 
     CONTACT:  Richard N. Grubb, Executive Vice President and Chief Financial
 Officer or Robert A. Freece, Senior Vice President, 610-644-1300, both of
 Vishay.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X85747177
 
 SOURCE  Vishay Intertechnology, Inc.

RELATED LINKS

http://www.vishay.com