Fri, Jan 15, 2010 - Page 12 News List

Compal acquisition sends shares soaring

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Compal Electronics Inc (仁寶), the world’s biggest maker of notebook computers by shipments, climbed to its highest level in more than nine years in Taipei trading after Motorola Inc said it sold its European modem business to the Taipei-based company.

Compal added 3.4 percent to close at NT$48.05 on the Taiwan Stock Exchange, the highest since April 18, 2000, compared with a 1.14 percent gain by the benchmark TAIEX index. The volume of 59 million shares was more than double the 25 million daily average over the past 90 days.

Motorola said in an e-mailed statement on Wednesday that it sold its Europe, Middle East and Africa unit to Compal, without giving a value for the transaction.

The acquisition will help boost Compal’s annual revenue by NT$6.3 billion (US$198 million), the Chinese-language Economic Daily News reported yesterday, without saying where it got the information.

Compal chief financial officer Gary Lu (呂清雄) declined to say how much the unit would contribute to sales. The acquisition, for less than US$300 million, was made by Compal Broadband Networks (鋐寶), Lu said.

“Compal has a small non-notebook business, so the market is excited by this idea,” Sinopac Securities Corp (永豐金證券) said in a report yesterday. “In two or three years, the shipment growth for notebook makers will shrink, so they need to find new businesses.”

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