Shenzhen Luxshare Approved to Buy 25.2% Stake in Taiwanese Connector Maker Speed Tech

Taipei, Nov. 27, 2012 (CENS)--Taiwan's Ministry of Economic Affairs (MOEA) already approved an application filed by the China-based Shenzhen Luxshare Precision Industry Co., Ltd. for buying a 25.20%% stake in Speed Tech Corp., a connector maker on the island, making it the first stake buy by a Chinese enterprise from a publicly listed Taiwanese company.

Shenzhen Luxshare, founded in 2004 and engaged in connectors mainly for 3C products and automotives, will acquire a 25.20% stake in Speed Tech for NT$450 million via its fully-owned subsidiary headquartered in Hong Kong. This acquisition deal will make the Chinese firm the largest shareholder in Speed Tech.

Officials of the Investment Commission under the MOEA noted that the acquisition case was quickly approved on November 23 after being submitted in early October, as connector production doesn't involve sensitive high technologies protected by the government.

In fact, Shenzhen Luxshare had actively approached Taiwanese connector manufacturers, including E & T Corp. and Joinsoon Electronics Mfg. Co., Ltd., for bilateral cooperation and acquisitions since early this year. Eventually, the Chinese firm chosen Speed Tech in consideration of the latter's consummate R&D capabilities to set up a joint venture in Guangdong, southeastern China this February. Later on, the Chinese firm decided to spend NT$450 million acquiring a majority stake to strengthen its ties with the Taiwanese partner.

Shenzhen Luxshare earned RMB2.16 billion (NT$9.72 billion at RMB1: NT$4.5) in accumulative revenue for the first nine months of this year, up 19.72% from a year ago, with net profits of RMB180 million (NT$810 million).

Institutional investors said that Speed Tech is likely to penetrate supply chains of Huawei and ZTE with its connectors for communication devices through cooperation with Shenzhen Luxshare to drive its business growth in the future. The Taiwanese company raked in sales revenue of NT$849 million in the first 10 months of this year, down 23.14% from the same period of 2011.