Advantech, AsusTek ally, swap stock, for industrial computing

11/11/2005


Cincinnati, OHAdvantech Co. Ltd . and AsusTek Computer Inc . (computer manufacturers for industrial and commercial computing, respectively) are entering a strategic alliance through a share swap and will form a joint venture tentatively called AdvanSus). The companies plan to “to pursue new business opportunities in industrial computing” and collaborate on new product developments, manufacturing, and quality. Each will devote employees to the effort. Target markets include industrial computing design and manufacturing service (D&MS), industrial mobile, industrial motherboard, and industrial server segments. The joint venture is expected to begin operations mid-2006.

The agreement says AsusTek will hold 15% of Advantech’s shares, one seat on Advantech’s board of directors, and one supervisor position. Advantech will own 1.4% of AsusTeks shares. AsusTek will issue new shares in exchange of 10% of Advantech’s share after Advantech’s capital increase. For the remaining 5%, Advantech will arrange specific current shareholders to make the share exchange with AsusTek. The swap ratio is set at 1.13 shares of Advantech to 1 share of AsusTek. The ratio is mainly derived from companies’ recent stock market prices, with reference to other performance indicators, such as net worth per share, earnings per share, and future business potential.

Jonney Shih, AsusTeck CEO offered praise: “Under the leadership of Mr. KC Liu, Advantech has created high brand value and outstanding business results in industrial computing. It is a respectable learning model.” Liu said he expects Advantech “to leverage AsusTek’s expertise in quality, R&D and cost control,” augmenting Advantech’s efforts at low-volume, high-customization, and service-driven industrial computing.

According to the companies, AsusTek products include motherboards, graphic cards, and notebooks. AsusTek’s has more than 50,000 employees and global revenue of more than $10 billion. Advantech offerings include motion control, measurements, communication, embedded computing, industrial motherboards, applied computing, peripherals, custom platform design and development, and assistance for system integrators. Advantech has more than 2,000 employees, in 16 countries, with global revenue exceeding $400 million.

—Edited by Mark T. Hoske , Control Engineering MHoske@cfemedia.com





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