Mon, Feb 19, 2007 - Page 6 News List

Lite-On receives European approval for investments

By Kevin Chen  /  STAFF REPORTER

Lite-On IT Corp (建興科技) yesterday won EU approval to replace BenQ Corp (明基) as shareholder in Philips & BenQ Digital Storage Corp (PBDS, 飛利浦明基儲存科技), which makes optical disc drives for PC applications.

In a statement posted on its Web site on Friday, the European Commission said it approved Lite-On IT's entry after concluding that, "The transaction would not significantly impede effective competition in the European Economic Area or in any substantial part of it.''

PBDS was established in 2003 and is headquartered in Taipei.

Royal Philips Electronics NV of the Netherlands owns a 51-percent stake in the venture, with BenQ Corp controlling the remaining 49 percent.

Taipei-based Lite-On IT said on Dec. 28 that it planned to buy BenQ's 49 percent stake in PBDS for NT$260 million (US$7.88 million) to expand its share of the market for optical data-storage disk drives for PCs.

The EC said the horizontal overlap between the activities of Lite-On IT and PBDS would not give rise to competition concerns. Instead, the new entity would continue to face several strong, effective competitors, it said.

The deal should be completed next month, both Lite-On IT and Philips said when the deal was first announced on Dec 28. The new venture will be renamed Philips & Lite-On Digital Solutions (PLDS, 飛利浦建興數位科技).

The commission on Friday also said it had cleared Lite-On IT to buy the automotive playback modules (APMs) business of the Amsterdam-based Philips.

Following analyses of Lite-On IT's manufacture of APMs and its planned entry into PLDS, "There would be no risk of substantially reinforcing the new entities' position on the market for APMs and ... customers would continue to have both alternative and competing sources of supply," the commission said in another statement on its Web site.

Philips agreed in December to sell its APM subsidiary to Lite-On IT, without disclosing the financial details.

With its manufacturing operations mainly in Gyor, Hungary, the APM unit develops, manufactures and supplies CD and DVD playback modules to suppliers of vehicle audio, video and navigation systems.

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