Application of the merger of LITE-ON Technology Corporation, LITE-ON Electronics, Inc., SILITEK Corporation and GVC Corporation filed with the Commission

Application of the merger of LITE-ON Technology Corporation, LITE-ON Electronics, Inc., SILITEK Corporation and GVC Corporation filed with the Commission

Chinese Taipei

Case:

Application of the merger of LITE-ON Technology Corporation, LITE-ON Electronics, Inc., SILITEK Corporation and GVC Corporation filed with the Commission

Key Words:

restraint of competition, economic benefit

Reference:

Fair Trade Commission Decision on September 5, 2002 (the 565th Commissioners' Meeting)

Industry:

Computer Terminal Equipment Manufacturing (2612), Computer Peripheral Equipment Manufacturing (2613), Photonics Materials and Components Manufacturing (2792)

Relevant Law:

Articles 6, 11 and 12 of the Fair Trade Law

Summary:

1. LITE-ON Technology Corporation (LITE-ON Technology), LITE-ON Electronics, Inc. (LITE-ON Electronics), SILITEK Corporation (SILITEK) and GVC Corporation (GVC), all members of the LITE-ON Group, resolved to combine the four companies into one with LITE-ON Technology as the surviving company after the merger and the remaining three as non-surviving companies. An application of the merger was subsequently filed with the Fair Trade Commission (FTC)

2. The FTC investigated and concluded that the merger in this case is a merger as defined in Article 6(1)(i) of the Fair Trade Law "where an enterprise and another enterprise(s) are merged into one." The sales for the preceding fiscal year of each of the enterprises in the merger-LITE-ON Technology, LITE-ON Electronics, SILITEK and GVC- exceeded the threshold sales amount publicly announced by the FTC as triggering the requirement for a merger filing under Article 11(1)(iii) of the Fair Trade Law. Accordingly, an application of the merger was required to be filed with the FTC. In addition, the participating enterprises filed such a merger application have complied with Article 7(1)(i) of the Enforcement Rules to the Fair Trade Law. Based on these grounds, the FTC accepted the merger filing.

3. The four companies in the merger filing all belong to the same enterprise group, namely the LITE-ON Group, and no competitive relationship exists between them. Each of the four companies has its own separate major business category and that their products range from monitors, keyboards, multifunction peripherals, power supplies, and photonics to cellular phones, encompassing the computer peripherals, components and communications industries. Thus, the merger will not result in restraint of competition. In addition, consolidation of production resources among the four companies, enhancement of operating efficiency, streamlined organization, and reduced personnel, management, and distribution expenditures will result from the merger. It is expected that price negotiation capabilities and market competitiveness will be improved by saving internal costs and integrating distribution channels. The market in which the merging enterprises sell their products is free and open to competit ion. There is no barrier to the entry or exit of domestic or foreign products, and other enterprises can freely enter and exit the market. Therefore, the applicants for the merger are not in a position to eliminate opportunities for other enterprises to enter the domestic market, and the merger will not have an adverse impact on other enterprises' entering or existing the market or have any detrimental effect on market competition. In conclusion, the overall economic benefit of the merger outweighs any disadvantages resulting from restraint of competition and therefore the merger is granted in accordance with the provisions of Article 12 of the Fair Trade Law.

Appendix:

LITE-ON Technology Corporation' s Uniform Invoice Number: 23357403
LITE-ON Electronics, Inc.' s Uniform Invoice Number: 04631182
SILITEK Corporation' s Uniform Invoice Number: 31088655
GVC Corporation' s Uniform Invoice Number: 31120472

Summarized by Lan, Yu-Chi;
Supervised by Shih, Chin-Tsun

**: For information of translation, click here

1.	LITE-ON Technology Corporation (LITE-ON Technology), LITE-ON Electronics, Inc. (LITE-ON Electronics), SILITEK Corporation (SILITEK) and GVC Corporation (GVC), all members of the LITE-ON Group, resolved to combine the four companies into one with LITE-ON Technology as the surviving company after the merger and the remaining three as non-surviving companies. An application of the merger was subsequently filed with the Fair Trade Commission (FTC)
2.	The FTC investigated and concluded that the merger in this case is a merger as defined in Article 6(1)(i) of the Fair Trade Law "where an enterprise and another enterprise(s) are merged into one." The sales for the preceding fiscal year of each of the enterprises in the merger-LITE-ON Technology, LITE-ON Electronics, SILITEK and GVC- exceeded the threshold sales amount publicly announced by the FTC as triggering the requirement for a merger filing under Article 11(1)(iii) of the Fair Trade Law. Accordingly, an application of the merger was required to be filed with the FTC. In addition, the participating enterprises filed such a merger application have complied with Article 7(1)(i) of the Enforcement Rules to the Fair Trade Law. Based on these grounds, the FTC accepted the merger filing.
3.	The four companies in the merger filing all belong to the same enterprise group, namely the LITE-ON Group, and no competitive relationship exists between them. Each of the four companies has its own separate major business category and that their products range from monitors, keyboards, multifunction peripherals, power supplies, and photonics to cellular phones, encompassing the computer peripherals, components and communications industries. Thus, the merger will not result in restraint of competition. In addition, consolidation of production resources among the four companies, enhancement of operating efficiency, streamlined organization, and reduced personnel, management, and distribution expenditures will result from the merger. It is expected that price negotiation capabilities and market competitiveness will be improved by saving internal costs and integrating distribution channels. The market in which the merging enterprises sell their products is free and open to competit ion. There is no barrier to the entry or exit of domestic or foreign products, and other enterprises can freely enter and exit the market. Therefore, the applicants for the merger are not in a position to eliminate opportunities for other enterprises to enter the domestic market, and the merger will not have an adverse impact on other enterprises' entering or existing the market or have any detrimental effect on market competition. In conclusion, the overall economic benefit of the merger outweighs any disadvantages resulting from restraint of competition and therefore the merger is granted in accordance with the provisions of Article 12 of the Fair Trade Law.