Compal Electronics to absorb Compal Communications
Aaron Lee, Taipei; Adam Hwang, DIGITIMES [Monday 30 September 2013]

Taiwan-based notebook ODM Compal Electronics will acquire as much as 100% of the circulating shares of smartphone ODM Compal Communications at NT$50.80 (US$1.71) per share and then absorb the latter as its business division, according to a decision made by its board of directors on September 30.

There are 317.38 million Compal Communications shares in circulation and Compal Electronics plans to acquire at least 30.39 million shares from October 1 to November 19. Currently, Compal Electronics alone holds a 47.78% stake in Compal Communications and together with its subsidiaries hold a 49.9% stake. The merger with Compal Communications will be finished by the end of April 2014, Compal Electronics indicated.

As Compal Electronics is dedicated to the development and production of notebooks and consumer electronics while Compal Communications is specialized in R&D and production of mobile communication devices, the combination can integrate both companies’ operational resources in R&D, supply chain, production and marketing to increase operational scale and decrease overall cost so as to enhance total competitiveness, Compal Electronics stressed.

Compal Electronics has seen negative impact from shrinking global demand for notebooks and expects merger with Compal Communications to boost Compal Group’s business growth, Compal Electronics president and Compal Communications chairman Ray Chen explained.

Compal Electronics currently has 84% of its consolidated revenues coming from notebooks, 7% from smartphones and tablets and 9% from other product lines, Chen indicated. Through the merger with Compal Communications, Compal Electronics expects the revenue proportion for notebooks to drop to 60%, while the share for smartphones and tablets will each rise to 15% and other revenue will be 10% in 2015-2016, Chen pointed out. Compal Communications has three main smartphone clients currently and the number is expected to increase to 5-6 in 2015, Chen said.

Despite expected a decline in global notebook shipments in 2013, Compal Electronics expects its shipments to slightly rise on year due to a hike in global market share, Chen pointed out.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s