Wed, Oct 09, 2013 - Page 13 News List

China Electric board approves purchase of stake in GIO

INTEGRATION:The move should help the firm tap into the LED packaging business and access key technologies in producing LED lighting components

By Lisa Wang  /  Staff reporter

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.

This story has been viewed 1927 times.

Comments will be moderated. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned.

TOP top