AU Optronics to Acquire LCD Manufacturer Quanta Display for $2.2 Billion
AU Optronics to Gain Market Share
April 8, 2006 -- AU Optronics Corp and Quanta Display Inc, both of Taiwan. have announced that they have agreed to merge via a $2.2 billion stock swap. AU Optronics, the world’s third largest LCD manufacturer, will now be considerably larger and much closer in size to the industry’s two largest companies LG.Phillips LCD and Samsung Electronics Co., both of South Korea.
The merged company, known as AUO, said their global market share will expand from approximately 15% to 19%. LG.Phillips LCD and Samsung are both about the same market share, around 22%.
This acquisition is the first mentionable deal in the LCD industry in quite some time. The last deal was when AUO was formed in 2001 when Acer Display Technology and Unipac Optoelectronics merged.
Stock holders of the two merging companies will have a say-so in this matter, however and will be asked to vote later in the year. The companies have targeted a consolidation date of October 1st, 2006, AUO said.
According to AUO, the stock swap will result in AUO offering one of it’s shares for every 3.5 Quanty Display shares, which is slightly higher than Quanta’s last closing price and AUO’s shares were approximately worth four times more than Quanta shares.
With the merger, AUO will mainly concentrate on the production of computer screens rather than TV screens, AUO said. If the merger is approved by stock holders, two board members of AUO’s Board of Directors will be appointed by Quanta Display Inc. K.Y. Lee and H.B. Chen of AUO will keep their positions as Chairman/CEO and President/COO of AUO, respectively. C.C. Leung of Quanta Display will be appointed as Vice Chairman, AUO said.
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