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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).
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 neighbor 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.
(Reporting by J.R. Wu; Editing by David Goodman)
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