Display-Maker BOE Seals $1.1 Billion Deal to Buy 35% of Smaller Rival
What’s new: BOE Technology Group Co. Ltd., one of China’s three leading makers of display panels, announced it will pay 7.55 billion yuan ($1.1 billion) for 35% of a money-losing smaller rival in the city of Chengdu.
BOE will make the investment through an injection that will increase the acquired Chengdu CEC Panda Display Technology Co. Ltd.’s registered capital from a current 14 billion yuan to 21.55 billion yuan, according to a stock exchange filing dated on Tuesday.
After the deal, BOE would become the Chengdu company’s single largest stakeholder, alongside six others that include regional and national investment companies, as well as electronics specialist CEC Panda.
What’s the background: BOE announced its intent to purchase the CEC Panda Display in September, though at that time it said it was aiming to buy a 51% stake. The Chengdu firm posted a loss of 1.3 billion yuan in the first six months of this year, larger than its 965 million yuan loss for all of 2019.
The acquisition marks the latest step in consolidation for China’s display-making industry, which is emerging as a world leader centered on three companies: BOE, TCL Technology Group Corp. and Tianma Microelectronics Co. Ltd.
In a similar move, TCL in June announced plans to acquire an additional 40% stake, worth about 4.2 billion yuan, in Wuhan China Star Optoelectronics Technology Co. Ltd. to boost its control of the company.
Quick Takes are condensed versions of China-related stories for fast news you can use. To read the full stock exchange announcement in Chinese, click here.
Contact reporter Yang Ge (firstname.lastname@example.org)
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