Having brewed the plan for nearly a year, Taiwanese monitor maker TPV has agreed to acquire part of Philips' PC monitor and entry-level flat TV businesses for approximately US$358 million. The transaction is expected to be finalized by mid-2005; the acquisition is to be paid with TPV's convertible bonds and 15% of its newly issued shares. TPV will continue to receive contacts from Philips.

 

The deal will give TPV access to Philips' PC monitor and flat TV production facilities in Suzhou and Dongguan China as well as the OEM (Original Equipment manufacturing) business and design center in Chungli Taiwan. The agreement also transfers Philips' monitor production in Szekesfehervar Hungary and Manaus Brazil to TPV. Meanwhile, Philips will retain its flat TV R&D centers in Bruges Belgium and in Singapore as well as mid to high-end TV production in Dreux France, Bruges Belgium, Juarez Mexico, Szekesfehervar Hungary, and Manaus Brazil.

 

TVP, the owner of brands AOC and Envision, has long been a production partner to Philips. The company hopes to further expand capacity and gain access to the flat TV market through the acquisition. It also projects that the deal will bump up its annual LCD (Liquid Crystal Display) monitor and total monitor shipments respectively to 16 million units and 35 million units in 2005, making it the world's largest monitor player.

 

Philips is selling a part of its display business due to the rapidly thinning profit margins in the LCD monitor segment. In the future, it will focus on advanced R&D design as well as the marketing and sales of PC monitors and flat TVs under its brand and affiliated brands.

 

Beijing-based BOE, TPV's largest shareholder, will continue to hold the largest portion of the company's stocks, while Philips will become the second largest shareholder. TPV will also be acquiring BOE's 45.2% holdings in their joint venture OTPV, aiming to integrate all OTPV assets into TPV.