High Tech Computer Corp (HTC, 宏達電), the world's top maker of mobile phones operating on Microsoft Corp's system, said yesterday it planned to acquire a local handset vendor to build a greater presence in fast-growing Asia-Pacific markets.
The company said it would spend US$150 million to buy a more than 50-percent stake in local handset vendor Dopod International Corp (多普達), which has US$27.6 million in capital.
The companies have not yet decided whether the transaction would be made using a share swap or cash.
"We believe Asia is a market with great potential This is the market we want [to have a share in]," High Tech Computer spokesman Martin Liu (劉在武) told a press conference yesterday.
Liu said the deal would not affect its cooperation with any of its current operator customers, mostly in Europe, as Dopod would focus on Asian markets. The deal was scheduled to be closed by the end of the year, he said.
The merger announcement came after the stock markets closed. Before the announcement, it was speculated that High Tech Computer might use the press briefing to announce a deal with potential strategic partners such as Softbank Corp of Japan.
Those rumors boosted shares of High Tech Computer by 3.48 percent to NT$1,040 on the Taiwan Stock Exchange. Since the beginning of the year, shares have surged by 64 percent.
High Tech Computer last year more than tripled its earnings to NT$11.78 billion (US$367 million), or NT$33.2 per share, compared to NT$3.86 billion in 2004, according to the company's filing to the stock exchange. Sales jumped to NT$71.89 billion from NT$35.65 billion during the same period.
The company made a breakthrough in Asian markets early this year when it began to supply phones to Japan's biggest mobile carrier NTT DoCoMo Inc after building a solid presence in Europe by making phones for European operators such as Vodafone on a contract basis.
Market researcher Gartner Inc said that handset sales in Asia-Pacific markets will have the fastest composite annual growth rate of 17.7 percent to 1.09 billion units during 2001-2009, compared to an overall rate of 7.7 percent.
Dopod, registered in the Cayman Islands in 2002, sold 300,000 own-brand mobile phones made by High Tech Computer in the Asia-Pacific region last year. The company hopes to triple sales to around one million units this year.
Dopod posted US$8 million (NT$256.64 million) in net income, or US$2.9 per share, for last year on sales of US$130 million.
Dopod was planning to launch an initial share offering in Hong Kong next year, but it could suspend the share sale in the wake of the deal with High Tech Computer, said Dopod chief financial officer Kenny Yang (楊世寧).
Dopod currently has a total of 210 employees.
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