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China firm seeking to acquire stake in Taiwan's Viking Tech

China firm seeking to acquire stake in Taiwan's Viking Tech

Taipei, Sept. 23 (CNA) Guangdong Fenghua Advanced Technology (Holding) Co. (????), a Chinese electronics component supplier, has tendered an offer to acquire a 35-40 percent stake in Taiwan's Viking Tech Corp. (??). Under the proposed deal, which is subject to approval by Taiwan's Investment Commission, Fenghua is offering NT$29.8 (US$0.91) per share, a 25.7 percent premium over Viking Tech's closing level on Tuesday. The Chinese company is aiming to acquire 41.07 million to 46.94 million Viking Tech shares, which would make it the biggest shareholder in the Taiwanese firm. If the deal goes through, it will be the first acquisition of a Taiwanese company by a Chinese enterprise through a tender offer. Fenghua's product portfolio covers a wide range of devices, such as capacitors, thick film, resistors, semiconductors, and magnetic components for the information technology market. For its part, Viking Tech largely makes electric resistors and high frequency inductors. Fenghua has been listed on the Shenzhen stock exchange since 1996, while Viking Tech launched a listing on Taiwan's over-the-counter (OTC) market in 2011. The Fenghua offer prompted investors in Taiwan to buy into Viking Tech shares soon after the local equity market opened Wednesday and the stock closed up 10 percent, the maximum daily increase, at NT$26.05. Viking Tech shares outperformed the broader OTC market, where the index ended down 1.81 percent at 117.64 points amid volatility on the global markets. Taiwan-based Optotech Corp.(??), a LED chip supplier that is one of the biggest shareholders of Viking Tech, has signed an agreement with Fenghua to sell 17.3 percent of its stake in Viking Optptech to the Chinese company. Boosted by the share sale agreement, shares of Optotech closed up 3.73 percent at NT$10.30 Wednesday on the Taiwan Stock Exchange, while the weighted index plunged 2.06 percent to end at 8,193.42 points. Market analysts said Viking Tech and Fenghua have complementary product portfolios and the acquisition will make them both more competitive in the global market. Analysts said that Viking Tech is likely to take advantage of Fenghua's broad distribution network in China to market its products there. (By Jalen Chung, Han Ting-ting and Frances Huang)


Updated : 2021-04-17 19:47 GMT+08:00