Leading Chinese manufacturer of energy-saving bulbs plans to invest NT$2.35 billion (US$81 million) in a Taiwanese competitor, which would be the largest Chinese investment in the country, the company announced on Tuesday.
Formosa Epitaxy, a supplier of LED chips for bulbs, reported in a statement that it will sell up to 120 million new shares to the subsidiary of Chinese Sanan Optoelectronics at a price of NT$19.6 per share. Sanan Optoelectronics, a manufacturer of LED bulbs and solar energy equipment, will become the largest shareholder of the Taiwanese company with a 19.9% ownership stake after the deal is finalized.
The two companies are expected to sign a share subscription agreement on Tuesday, which will take effect after it is approved by shareholders, Formosa Epitaxy stated.
The agreement still needs regulatory approval and could be the largest single Chinese investment in Taiwan since the country eased foreign investment regulations in 2009, the relevant Taiwanese commission noted.
From mid-2009 to the end of September 2012, Taiwan approved a total of 303 investments from Chinese companies amounting to US$315 million, according to commission data.
Relations with China significantly improved after pro-Beijing Ma Ying-jeou took office in Taiwan in 2008, leading to the signing of 18 agreements aimed at boosting exports and investments.
Officially, Beijing still considers Taiwan part of its territory and awaits reunification, including by force if necessary.
