Lite-On Technology Corp (光寶科技), the world's second-largest maker of mobile phone keypads, said yesterday that it had made a public tender offer to buy Perlos Corp, the world's largest handset casing maker.
Lite-On is offering 5.2 euros (US$7) in cash per share, at a cost of 277 million euros for the Finnish firm.
Lite-On's tender represents a premium of 40.5 percent over Perlos' closing price of 3.7 euros on the OMX Nordic Exchange Helsinki on Friday.
Perlos makes casings for Nokia Oyj and Research in Motion Ltd and had a 16 percent share of the world market last year.
Perlos's largest shareholder, Oy GW Sohlberg AB, has committed to sell its 29.1 percent stake in the company to Lite-On.
The tender offer is expected to begin on Sept. 3, and runs for approximately five weeks, Lite-On said in a statement yesterday.
Perlos would be delisted from the Helsinki stock exchange after the acquisition and will operate as an independent business entity within the Lite-On Group (光寶集團), the statement said.
"The deal would create a new powerhouse in the handset supply chain," the statement said.
Both sides will benefit as Perlos has a global manufacturing platform spreading across the Americas, Europe and Asia, while Lite-On has strong relationships in the Taiwan and China handset supply chain, the statement said.
"This acquisition will equip Lite-On with mechanical capabilities, in addition to its electronics component power," said David Lin (林行憲), Lite-On Group chief executive.
He said the deal would bring an estimated NT$30 billion (US$0.9 billion) to NT$40 billion in sales to Lite-On next year, and a total of NT$150 billion to NT$200 billion sales in the next five years.
Lite-On shares closed up 4.4 percent to NT$52.80 on the Taiwan Stock Exchange yesterday before the announcement was made
Lite-On provides camera-phone modules, light-emitting-diode flashlights, keypads, global positioning systems and sensors for its handset customers.
Perlos will complete the product portfolio by adding casing, antenna and sub-assembly for modules, Lite-On said.
The link-up will significantly strengthen its handset component cluster capabilities to provide more products and better services to handset customers, it said.
But analyst Jamie Wang (
"It should establish a niche," she said.
She said leading Taiwanese firms such as Compal Communications Inc (華寶通訊) are losing their market share, and Lite-On will have to differentiate itself by making smart handhelds, for example.
She also said that Lite-On had not fared well in the handset contract business in the past.