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TPV's purchase of Philips unit places it in top spot

Taipei-headquartered TPV Tech-nology Ltd (冠捷科技) yesterday agreed to buy Amsterdam-based Royal Philips Electronics NV's PC monitor unit, making it the world's largest PC monitor maker, up from its current second place.

The deal is worth approximately 269 million euros (US$358 million), based on TPV's 15-day volume weighted-average share price prior to signing.

The business to be transferred to TPV amounts to around 1.5 billion euros (US$2 billion), including an original-equipment-manufacturing (OEM) business worth 700 million euros and 800 million euros-worth of outsourcing of Philips' branded monitors and entry-level flat television (TV) products.

The deal will propel TPV past Samsung Electronics Co to become the world's largest PC monitor manufacturer, with an annual shipment exceeding 35 million units.

"This deal is beneficial to both parties," said Annabelle Hsu (徐美雯), a research manager on the display industry with Market Intelligence Center, a research house based in Taipei.

"TPV will not only obtain econ-omies of scale to reduce costs and, in turn, sharpen its competitiveness, but will also strengthen its foothold in the liquid-crystal display (LCD) TV market, which is expected to take off in 2006," Hsu said.

Meanwhile, the deal will help Philips reduce its manufacturing burden and transform into a branding and marketing-driven consumer electronics business, she said.

Under the proposed agreement, TPV would take over Philips' monitor and flat TV production in China's Suzhou and Dongguan, as well as monitor manufacturing in Szekesfehervar, Hungary, and Manaus, Brazil, according to a joint press release by the two companies.

TPV will also attain Philips' OEM sales team and a research and development center located in Chungli, Taoyuan County, the statement read.

The partnership also allows Philips to receive a roughly 15 percent of stake in TPV, which has been listed on the Hong Kong and Singapore stock exchanges since Oct. 1999.

BOE Technology Group (京東方科技), a Chinese company listed on the Shenzhen B Stock Exchange since June 1997, is TPV's largest shareholder, with a 24.5-percent stake.

TPV's net income for the first three quarters of this year grew by 85 percent year-on-year to US$87.79 million, or US$0.064 per share, on consolidated revenue of US$2.65 billion, up 96.3 percent from US$1.35 billion a year ago.

The company shipped 18.02 million units of both cathode-ray tube and LCD monitors in the first nine months of this year, second only to Samsung's 18.96 million units over the same time.
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