Deal to benefit display giant BOE
By Liu Baijia (China Daily)
Updated: 2004-12-17 09:22

Chinese display giant BOE Technology may become the biggest beneficiary in an international deal, after Chinese computer company Lenovo Group acquired IBM's personal computer unit less than 10 days ago.

The Dutch giant Royal Philips Electronics and Hong Kong and Singapore-listed Chinese computer maker TPV Technology said yesterday they had signed a letter of intent for Philips to sell its computer monitors and part of its low-end flat-screen TV businesses to Taiwan-based TPV Technology.

The deal is priced at US$358 million and TPV Technology will pay with its shares, equivalent to 30 per cent of its expanded market capital.

The Hong Kong-listed computer display maker will issue 15 per cent of new shares and convertible bonds equivalent to another 15 per cent of TPV technology's stocks.

The revenues transferred into Taiwan-based TPV Technology will be about US$2 billion.

Jason Hsuan, chairman and CEO of TPV Technology, said the deal was supported by its biggest shareholder - BOE Technology.

TPV Technology will also acquire the remaining stakes in its 41.7 per cent-held joint venture Oriental Top Victory Electronics (OTPV) from BOE Technology.

The Beijing-based BOE owns 25.4 per cent of TPV Technology and when the OTPV acquisition deal is completed, it will hold 24.2 per cent of shares in TPV Technology, while Philips' share will be reduced to 15 per cent.

BOE, which has been very aggressive in the overseas acquisitions of South Korean's Hynix Display and TPV Technology in the past two years, will remain the biggest shareholder of TPV Technology and control the world's biggest computer monitor maker.

It has become the second Chinese company to take centre stage in less than 10 days, after Lenovo.

The Chinese computer maker acquired IBM's personal computer business for US$1.75 billion on December 8 and the combined strength of the two companies will make Lenovo the third largest computer maker in the world.

Although TPV Technology is already the world's second largest computer monitor maker, the acquisition of Philips' related business will strengthen its technological capacity, elevate its brand, as well as bring in manufacturing contracts outsourced to Philips.

BOE, which owns complete liquefied crystal display (LCD) technologies and is a strong player in the field, will also heighten control of the whole industrial chain.

Trading of TPV's stocks in Hong Kong was suspended yesterday due to the announcement of the acquisition.

Philips' stocks on the EuroNext Amsterdam bourse shed 0.1 per cent to 19.73 euros (US$26.24) and its stocks on the New York Stock Exchange gained 0.49 per cent to US$26.60.

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