Foxconn and Quanta Merge May Be Near

by Anton Shilov
10/03/2006 | 11:23 PM

Recent rumours about potential merge between the world’s leading contract manufacturer of computer components – Foxconn – and the world’s largest maker of notebooks – Quanta – have lately resurfaced with new details which claim that the deal is inevitable and even show the terms of the agreement.

Chinese-language Economic Daily News reportedly claims that the leading contract components maker will merge with Quanta through a share swap, with every 3.5 Quanta shares to be converted to one Foxconn share, reports DigiTimes web-site.

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

Foxconn and Quanta, respectively, have dismissed the merger rumors. According to Foxconn spokesperson Edmund Ding, the company has never discussed any merger plan with Quanta and the rumors are groundless. Quanta denied it and claimed the speculation has mislead investors.

Earlier it was reported that Quanta Computer slashed this year’s shipment goal to 21 million units of laptops from the 24 million units predicted earlier. In the beginning of the year Quanta was reported to expect 25 million of its notebooks to be shipped. The decrease of the expectation is associated with slow demand for mobile computers in the first half of the year. At the same time, the same source claims that Compal, the world’s No. 2 maker of notebooks, has not reduced its shipment goal from 15 million units in 2006.