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USI prepares to buy Abit’s motherboard division ! - 1/26/2006 6:26:35 AM   

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Universal Scientific Industrial (USI), a Taiwan-based design and manufacturing service (DMS) supplier, today announced that it will establish a new subsidiary to acquire the motherboard division of Abit Computer, subject to a definitive agreement signed by both parties. In a press release about an hour before USI’s announcement, Abit announced the “merger”, but no details were provided.

Under the terms of the agreement, USI will pay a total of NT$350 million in cash and 20 million preferred shares of USI’s newly established subsidiary for Abit’s motherboard brand “ABIT”, as well as all patents, products, business and human resources related to its motherboard business, according to USI’s release. In April 2005, Wan Hai Lines purchased 23% of Abit with NT$433 million. The latest transaction shows a significant decline in the value of the company. This has been reflected by the stock price, which has fallen more than 70% since April last year.

In addition to motherboards, Abit has sold DigiDice mini barebone PCs, graphics cards and accessories. The barebone business stopped a couple of years ago, production of graphics cards ceased in the middle of last year, and the accessories have been mainly sold bundled with motherboards. It’s unclear what USI is not acquiring.

CY Wei, president of USI, said, “Motherboards are one of USI’s main product lines and we are confident that the acquisition provides an opportunity for USI to benefit from Abit’s outstanding brand image and well-developed channels in Asian, American and European markets in order to expand USI’s share in the motherboard market and become one of the tier one motherboard suppliers in the world.”

USI expects that by integrating the two companies’ motherboard businesses, its annual motherboard shipments will increase to exceed 10 million units in the future. Abit’s annual motherboard shipments are approximately 2-2.5 million units, according to USI.

Source : DigiTimes
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