Application by Twinhead International Corp. for approval to merge with Uniwill Computer Corp.
Case:
Application by Twinhead International Corp. for approval to merge with Uniwill Computer Corp.
Key Word:
merger
Reference:
Fair Trade Commission Decision of July 12, 2001 (the 505th Commissioners' Meeting); Decision (90) Kung Chieh Tzu No. 648
Industry:
Other Computer Equipment Manufacture Industry (3149)
Relevant Laws:
Summary:
1. Twinhead International Corp. (Twinhead) is seeking to merge with Uniwill Computer Corp. (Uniwill) with Twinhead being the surviving enterprise and Uniwill the dissolved enterprise. As the merger involves "merge(ing) with another enterprise" as prescribed in Article 6(1)(i) of the Fair Trade Law (FTL). Twinhead filed an application with the Fair Trade Commission for merger approval in accordance with the provisions of Article 11(1)(iii) of the FTL. 2. Twinhead ranks second in the domestic notebook computer market in terms of market share and is a well-established domestic brand in the local market. Uniwill specializes in original equipment manufacturing (OEM) of notebook computers, selling products, not under its own brand name, on a contracted manufacturing basis for foreign companies, while distributing only a small number to domestic companies. These domestic companies then export [the Uniwill products] to other countries. Uniwill's products are thus seldom distributed in the local market; the volume listed under domestic sale is eventually exported via domestic trading companies. Therefore, the merger of these two enterprises will have limited impact on the market share and degree of concentration in the domestic notebook market. Further, the notebook computer industry is now a mature industry and, given the limited demand for notebooks in Chinese Taipei's domestic market, all major manufacturers concentrate on the international market. There are a large number of domestic manufacturers either distributing their own brand-name products or specializing in OEM production. The global market share for Twinhead and Uniwill is 0.99 % and 1.22 % respectively. Production volume of the two companies could reach 1 million after the merger, which amounts to a minor 3 % share of the global market. The merger is unlikely to constitute an entry barrier for the market. 3. The major components of notebook computers are all imported from overseas. The merger of Twinhead and Uniwill will help strengthen their bargaining power with overseas component suppliers, reduce production costs, expand operational scale, integrate technological and human resources, upgrade operational efficiency and continue distributing their brand-name computers in both domestic and overseas markets. The company may continue selling their own-brand notebook computers on the domestic and international markets while taking the opportunity to adjust the company's ratio of OEM production in their business operations to increase competitiveness. The overall economic benefits of this merger outweigh any potential restraint on market competition. The application is therefore approved under Article 12 of the FTL. Appendix: Twinhead International Corp.'s Uniform Invoice Number: 79883646 Uniwill Computer Corp.'s Uniform Invoice Number:16749495 Summarized by Chen, Shu-Hua; Supervised by Shih, Chin-Tsun