03.14.2001
ADT and Unipac announce mega merger

• Acer Display Technology (ADT, 2409 'Da Ji') and Unipac (5441 'Lian You') jointly announced their merger plan yesterday afternoon. The merged entity will be called AU Optronics and will list on the main board Taiex.

• AU Optronics will have paid-in capital of NT$29.7b. At current share prices, each share of ADT is worth 1.17 Unipac shares. Acer Communications and Multimedia (ACM, 2352 'Ming Ji') and UMC (2303 'Lian Dian') will both hold around 20% of shares.

• The new company is expected to rank among the top three TFT-LCD panel firms in the world in terms of capacity. It will have five TFT-LCD fabs: a 1-Generation line, three 3.5-Generation lines and one 4-Generation line. AU Optronics' product line will be comparable to that of Sharp (Japan), the world leader in display technology.

• We believe this horizontal merger can create synergy, reflecting operating economies and increased market presence. The merged ADT and Unipac will make for economies of scale in production, distribution, management and R&D, resulting in lower costs. The move will also reduce competition and help the new company gain greater market share. In the current sluggish TFT-LCD market, cost cutting is critical to improving profitability.

• Currently, Korean TFT-LCD makers use their largest industry capacity and market share to dominate TFT-LCD market price. AU Optronics will boost the competitiveness of Taiwan TFT-LCD compared to peers in Korea and Japan. We believe in the long term the merger is good news for both firms' development in the area of display technology.

MarthaChen@Primasia.com +886-[0]2-2547-8887