Abu Dhabi's state fund Advanced Technology Investment Co. has offered S$2.68 a share in cash to buy Singapore chip-manufacturer Chartered Semiconductor Manufacturing Ltd.

ATIC's offer of 2.68 Singapore dollars a share valued the Chartered Semiconductor, which is one of the world's largest chip-manufacturer, at approximately US$1.8 billion.

ATIC's offer is lightly higher than the Singapore-based chip foundry's Friday closing price of S$2.66 a share.

Including debt & convertible redeemable preference shares worth US$2.2 billion, the deal is valued at around US$3.9 billion.

When contacted, Waleed Al Mokarrab, ATIC chairman, said, "We believe that by having access to ATIC's long-term capital and related assets, Chartered has an opportunity to bring its skills, capabilities and leadership to the next level."

Chartered Semiconductor, which is a victim of recent global recession, manufactures custom-built micro-chips for set-top boxes, MP3, DVD players plus video games.

This is the second major investment by Abu Dhabi in the semi-conductor industry. Earlier, it created Globalfoundries which is US-based joint venture with Advanced Micro Devices Inc.

The deal is yet to obtain approval from shareholders of Chartered Semiconductor and is subject to be endorsed by the Singapore High Court.