China Electric Manufacturing Corp (中國電器), which sells lighting products under the TOA (東亞) brand, yesterday said its board had approved plans to buy a 60 percent stake in a local LED chip packager for NT$128 million (US$4.33 million) in cash to strengthen its position in the LED supply chain.
The Taipei-based company plans to buy 160 million common shares of GIO Optoelectronics Corp (啟耀光電) at NT$0.8 per share on the open market from today through Nov. 18, according to its filing submitted to the Taiwan Stock Exchange.
The offer represented a 69 percent discount from GIO’s closing price of NT$2.60 yesterday on the Emerging Stock Market.
Chimei Corp (奇美實業), GIO’s biggest shareholder, yesterday said it had signed an agreement with China Electric to sell its 40 percent stake in GIO, which reported a net loss of NT$121 million in the first half of this year, compared with a net loss of NT$25.57 million in the same period last year.
Innolux Corp (群創光電) is another major shareholder of GIO, with a 23 percent stake.
“The acquisition aims to help the company tap into the LED packaging business and access key technologies in LED lighting component manufacturing,” China Electric spokesman Lee Chung-lung (李宗龍) said in the filing.
“This should help China Electric integrate its LED lighting supply chain and resources, which will significantly boost its competitiveness, sales and profitability,” Lee said.
Sales of lighting products accounted for 20 percent of the company’s total revenue of NT$7.07 billion last year.
China Electric, which also owns a stake in local LED chipmaker Lextar Electronics Corp (隆達電子), said it would retain GIO’s existing management team and product portfolio in the short term.
The deal is expected to close by the end of this year after it is approved by the Fair Trade Commission, the local competition watchdog, the company said.
China Electric shares advanced 2.33 percent to NT$15.40 yesterday.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
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The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
PRESSURE EXPECTED: The appreciation of the NT dollar reflected expectations that Washington would press Taiwan to boost its currency against the US dollar, dealers said Taiwan’s export-oriented semiconductor and auto part manufacturers are expecting their margins to be affected by large foreign exchange losses as the New Taiwan dollar continued to appreciate sharply against the US dollar yesterday. Among major semiconductor manufacturers, ASE Technology Holding Co (日月光), the world’s largest integrated circuit (IC) packaging and testing services provider, said that whenever the NT dollar rises NT$1 against the greenback, its gross margin is cut by about 1.5 percent. The NT dollar traded as strong as NT$29.59 per US dollar before trimming gains to close NT$0.919, or 2.96 percent, higher at NT$30.145 yesterday in Taipei trading
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