Taiwan's Merry Electronic and China's Luxshare agree alternative tie-up

Merry Electronics Co

18/07/2016 13:12

TAIPEI, July 18 (Reuters) - Taiwanese micro-audio specialist 
Merry Electronics  2439.TW  and China's Luxshare Precision 
Industry Co  002475.SZ  have agreed a potential 600 million yuan 
($90 million) tie-up less than a month after a separate deal 
between the pair had been blocked. 
    Shenzhen-listed Luxshare Precision plans to invest 400 
million yuan to 600 million yuan for a 40 percent to 60 percent 
stake in Merry's manufacturing unit in Suzhou, China, the 
companies announced on Monday. 
    The move follows swiftly on the heels of a rejection by 
Taiwan regulators of a plan by Luxshare Precision's Hong Kong 
unit to take a 25.4 percent stake in Merry for T$3.78 billion  
($118 million).  urn:newsml:reuters.com:*:nL4N19M3SG 
    Taiwan regulates China-related investments in the island's 
technology industry very carefully, given that the sector is a 
mainstay of the economy, with Taiwan's new government more wary 
of its neighbour than the previous government. 
    "We have not given up on the previous investment plan," 
Merry Electronics spokesman Allen Huang told reporters, adding 
that the new plan agreed in a letter of intent is aimed at 
giving both companies a better chance at clinching future 
business. 
    The new investment plan will expand capacity at the Suzhou 
plant, which mainly produces audio speakers, Huang said. 
    Luxshare Precision said the investment will increase the 
competitiveness of both companies in the audio electronics 
market. It made no mention of the previous plan to take a stake 
in the parent company. 
    Huang also said that the new deal is unlikely to require 
approval from Taiwan regulators because no capital in entering 
or leaving Taiwan via the investment into the Suzhou plant, but 
that the company will communicate with regulators on the deal. 
    Merry Electronics makes headsets, speakers, amplifiers and 
other small acoustic devices. 
($1 = 6.7017 Chinese yuan renminbi) 
($1 = 31.9880 Taiwan dollars) 
 
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Taiwan rejects China's Luxshare investment in Merry Electronics  
   urn:newsml:reuters.com:*:nL4N19M3SG 
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 (Reporting by J.R. Wu; Editing by David Goodman) 
 ((jr.wu@thomsonreuters.com; +886 2 2500 4881; Reuters 
Messaging: jr.wu.thomsonreuters.com@reuters.net)) 
 
Keywords: MERRY LUXSHARE/