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Quanta’s Chief Exec Resigns as Merge Talks with Foxconn Continue.

Category: Mobile

by Anton Shilov

[ 08/27/2007 | 11:19 PM ]

About a year after it was reported about the merge talks between Hon Hai Precision Industry (the company mostly known for its Foxconn Electronics brand-name) and Quanta Computer, chief executive of the latter, Michael Wang, resigned from the company. Media speculates that the resignation took place ahead of the deal announcement by Foxconn and Quanta.

Quanta Computer, the world’s largest contract maker of notebooks, was founder in 1988 by Barry Lam and C.C. Leung, who now intend either to sell off the whole company to Foxconn Electronics, or to sell part of the company or form a strategic alliance with the world’s largest contract manufacturer. Michael Wang, who served as chief executive for 19 years, believed that Quanta should stay independent.

On Friday, the 24^th of August, Mr. Wang officially resigned and C.C. Leung became the head of the company. In a press release Quanta indicated that the former chief executive quit the company because of “personal career planning” issues. However, an internal email that the former head of the company sent to employees named merger talks with Foxconn Electronics as a primary reason for his resignation.

“In regards to merger with Hon Hai, the Company would like to reiterate that there is no plan to engage in such a merger. Company requests investors not to be misled by such false rumors,” a statement by Quanta Computer reads.

Foxconn Electronics manufactures virtually all kinds of computer equipment and also produces a lot of popular consumer electronics devices, including Apple iPod digital media players. However, the company does not have a strong presence in the market of mobile computers as well as cell phones. Therefore, acquiring Quanta Computer would open a lot of new doors to the world’s largest contract maker of electronics.

The combined company will not only have unprecedented revenues for Southeast Asia, but will also be a powerhouse able to manufacture virtually all types electronics equipment. If Foxconn merges with Quanta computer, it automatically enters the market of handsets and notebooks, turning into the world’s largest maker of mobile computers. Additionally, it will significantly outpace the rivals, such as Asustek Computer, Arima or Compal, substantially increasing pressure on the remaining players.