Sat, Sep 22, 2012 - Page 13 News List

Hon Hai Group to acquire 32% of MTI

COMPLEMENTARY:Hon Hai Precision, Cybertan Technology and MTI said that the investment would boost their competitiveness in high-speed 4G communications

By Amy Su  /  Staff reporter

Hon Hai Group (鴻海集團), the world’s largest contract electronics maker, yesterday said it would buy a 32 percent stake in local radio frequency (RF) chipmaker Microelectronics Technology Inc (MTI, 台揚科技) for NT$1.8 billion (US$61.12 million) to speed up development of long-term evolution (LTE), or 4G, technology.

Flagship firm Hon Hai Precision Industry Co (鴻海精密) and its wireless networking equipment affiliate, Cybertan Technology Inc (建漢科技), will invest NT$200 million and NT$1.6 billion respectively in MTI via private placement.

Hon Hai Group will buy about 20 million common shares for a 32.63 percent stake in MTI at NT$9 per share. That represents a 21.74 percent discount to MTI’s closing price of NT$11.50 yesterday.

“We have been pursuing [this kind of investment opportunity] for years,” Hon Hai Group chairman Terry Gou (郭台銘) told a media briefing after the three companies signed an investment agreement at the group’s headquarters in Tucheng (土城), New Taipei City (新北市), yesterday, as Unique Broadcasting (非凡電視) reported.

“Now is the right time [for the investment], also with the right partner,” Gou added.

Gou praised MTI’s specialization in designing and manufacturing microwave and satellite communications products, saying the investment should help strengthen the three companies’ competitiveness in high-speed 4G communications technology by combining their advantages and specializations.

Cybertan Technology chairman Gwong Lee (李廣益) shared Gou’s views.

Lee said the investment could deepen complementary technologies, as Cybertan Technology and MTI offer different advantages in the wireless communications sector.

“The cooperation with MTI could help Cybertan Technology expand its digital terrestrial set-top box product lines,” Lee said.

The two companies will also cooperate in researching and developing optimal 4G LTE products, such as outdoor Wi-Fi access points, Lee added.

MTI chairman Patrick Wang (王華燕) said that having these two strategic investors would enhance the company’s marketing strategy and and clientele, while reducing operating costs through a trilateral business cooperation.

Shares of MTI and Cybertan Technology both climbed to the daily maximum limit of 7 percent, closing at NT$11.50 and NT$23.80 respectively, before the signing of the investment agreement.

Hon Hai rose 0.83 percent to close at NT$96.80, slightly higher than the TAIEX, which edged up 0.35 percent, stock exchange data showed.

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