Tong Yang Industry Co (東陽實業), the nation’s biggest autoparts maker, announced yesterday it would acquire a 60.88 percent stake in Taiwan Kai Yih Industrial Co (開億工業) via a share swap.
Tong Yang already owns a 39.12 percent stake in Kai Yih, whose businesses include manufacturing and trading of automobile body parts, bicycle parts, metal parts and moldings.
The latest share acquisition will allow Tong Yang to merge its affiliated company completely, the Tainan-based company said in a stock exchange filing.
Tong Yang will be the surviving entity after the deal is closed on Sept. 1 next year, the filing said.
Both companies held respective board meetings yesterday to approve the deal, which would enable Tong Yang to issue 65.7 million new shares and to swap one of its shares for 1.55 shares of Kai Yih.
“The deal is expected to integrate group resources and lower operation costs. It will also help the company expand business scale, improve operation efficiency and increase global competitiveness,” the filing showed.
In the first 11 months of the year, Tong Yang posted a net profit of NT$1.68 billion (US$52 million), or NT$3.73 in earnings per share, which was an increase of 103.8 percent from a year earlier. Kai Yih, meanwhile, reported a net profit of NT$279 million, or NT$1.67 per share, during the same period, Tong Yang’s Web site said.
The merger deal was announced after the closure of the local stock market, where Tong Yang’s shares ended 0.4 percent higher at NT$57.20 and Kai Yih surged 5.7 percent to NT$33.50.
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