AUO gets 5.4% stake in affiliated BenQ

Taipei, Nov. 9, 2004 (CENS)--AU Optronics Corp. (AUO), Taiwan's No. 1 thin film transistor-liquid crystal display (TFT-LCD) panel maker, yesterday bought 124.9 million shares, or a 5.4% stake, of its affiliated BenQ Corp. for NT$4.05 billion (US$122.3 million at US$1: NT$33.1) or NT$32.4 (US$0.98) per share.

BenQ, the largest maker of computer peripherals and a major affiliate of the pan-Acer Group, now owns a 13.26% stake in AUO.

Industry sources said that cross-shareholding practice between AUO and BenQ is expected to help the two firms forge a stronger strategic alliance.

AUO bought BenQ's shares from Acer Inc., the flagship company of the Acer Group and the largest computer brand in Taiwan. Acer has disposed of about 5% of BenQ's shares annually in recent years. After the disposal, Acer currently holds about only a 9.52% stake in BenQ.

K.Y. Lee, chairman of both AUO and BenQ, stressed that through the cross-shareholding operation, the two companies could further strengthen their strategic alliance and better utilize each other's resources concerning brands and sales channels.

Some institutional investors, however, said that Acer's disposal of BenQ's shares was a clear move to make Acer and BenQ become more independent and competitive.

AUO's holding of BenQ's shares can help integrate their up- and down-stream resources, especially in TFT-LCD panel component, notebook PC, LCD monitor and TV, and cell-phone businesses.