Hon Hai Precision Industry Co (鴻海精密), the world's biggest electronics parts maker, said yesterday it would buy an 8.89 percent stake in laptop battery pack supplier Simplo Technology Co (新普科技) for NT$1.43 billion (US$43.2 million).
The acquisition would pave the way for Hon Hai to enter the laptop computer assembly business, an analyst said.
Simplo would issue 16.5 million new common shares
Hon Hai said it would purchase 16.5 million new common shares that Simplo would issue through a private placement for NT$86.89 a share, according to the company's filing to the Taiwan Stock Exchange.
Simplo, the world's No. 2 maker of notebook battery packs, will have 166.5 million outstanding shares following the share issuance.
Hon Hai's offer represented a 35.63 percent discount to Simplo's closing price of NT$135 on the over-the-counter GRETAI Securities Market yesterday.
The purchase would be a "long-term investment," Hon Hai said in the filing.
Hon Hai would make the investment through its two venture capital units, it added.
Hon Hai would be Simplo's biggest shareholder after the deal is closed, replacing notebook computer maker Quanta Computer Inc (
The acquisition is an indication that Hon Hai is taking steps to enter the notebook computer assembly business, said Lu Chia-lin (
Hon Hai has been thinking about breaking into the laptop assembly industry, which is now dominated by Quanta and Compal Electronics Inc (
Besides, "Hon Hai scored a cheap deal. A 35 percent discount is quite big," Lu said.
Hon Hai's share price climbed 2.83 percent to NT$218 yesterday.
With the support of Hon Hai, Simplo would also ease concerns of any potential hostile takeover attempts, Lu said.
Separately, Simplo said yesterday it would pay out NT$1 in cash dividends and 45 percent in stock dividends, based on last year's earnings.
Simplo earned NT$139 million, or NT$9.82 per share, in net income, last year, up 36 percent from 2005. Revenues jumped 46 percent year-on-year to NT$16.3 billion last year.
CAUTIOUS RECOVERY: While the manufacturing sector returned to growth amid the US-China trade truce, firms remain wary as uncertainty clouds the outlook, the CIER said The local manufacturing sector returned to expansion last month, as the official purchasing managers’ index (PMI) rose 2.1 points to 51.0, driven by a temporary easing in US-China trade tensions, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The PMI gauges the health of the manufacturing industry, with readings above 50 indicating expansion and those below 50 signaling contraction. “Firms are not as pessimistic as they were in April, but they remain far from optimistic,” CIER president Lien Hsien-ming (連賢明) said at a news conference. The full impact of US tariff decisions is unlikely to become clear until later this month
GROWING CONCERN: Some senior Trump administration officials opposed the UAE expansion over fears that another TSMC project could jeopardize its US investment Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is evaluating building an advanced production facility in the United Arab Emirates (UAE) and has discussed the possibility with officials in US President Donald Trump’s administration, people familiar with the matter said, in a potentially major bet on the Middle East that would only come to fruition with Washington’s approval. The company has had multiple meetings in the past few months with US Special Envoy to the Middle East Steve Witkoff and officials from MGX, an influential investment vehicle overseen by the UAE president’s brother, the people said. The conversations are a continuation of talks that
CHIP DUTIES: TSMC said it voiced its concerns to Washington about tariffs, telling the US commerce department that it wants ‘fair treatment’ to protect its competitiveness Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reiterated robust business prospects for this year as strong artificial intelligence (AI) chip demand from Nvidia Corp and other customers would absorb the impacts of US tariffs. “The impact of tariffs would be indirect, as the custom tax is the importers’ responsibility, not the exporters,” TSMC chairman and chief executive officer C.C. Wei (魏哲家) said at the chipmaker’s annual shareholders’ meeting in Hsinchu City. TSMC’s business could be affected if people become reluctant to buy electronics due to inflated prices, Wei said. In addition, the chipmaker has voiced its concern to the US Department of Commerce
STILL LOADED: Last year’s richest person, Quanta Computer Inc chairman Barry Lam, dropped to second place despite an 8 percent increase in his wealth to US$12.6 billion Staff writer, with CNA Daniel Tsai (蔡明忠) and Richard Tsai (蔡明興), the brothers who run Fubon Group (富邦集團), topped the Forbes list of Taiwan’s 50 richest people this year, released on Wednesday in New York. The magazine said that a stronger New Taiwan dollar pushed the combined wealth of Taiwan’s 50 richest people up 13 percent, from US$174 billion to US$197 billion, with 36 of the people on the list seeing their wealth increase. That came as Taiwan’s economy grew 4.6 percent last year, its fastest pace in three years, driven by the strong performance of the semiconductor industry, the magazine said. The Tsai
RSS