An application filed by Zenitron Corporation for a merger with Princeton Technology C&C Corporation

Chinese Taipei

Case:

An application filed by Zenitron Corporation for a merger with Princeton Technology C&C Corporation

Key Words:

Competition R estraint, Economic B enefit, Merger

Reference:

Fair Trade Commission Decision of September 2, 2005 (the 721st Commissioners' Meeting)

Industry:

?Electronic Components Distributor (6204)

Relevant Laws:

Article 6、Article 11 and Article 12 of the Fair Trade Law

Summary:

1. Zenitron Corporation (hereinafter referred to as Zenitron Co.) and Princeton Technology C&C Corporation (hereinafter referred to as Princeton Co.) planned to merge together through share swap, with Zenitron Co. being the surviving company and Princeton Co. being the merged company. Hence, the merger is filed with the Fair Trade Commission according to the regulations of Fair Trade Law.
2. The Fair Trade Commission’s investigation found that the merger of this application meets the definition of merger as stipulated in Subparagraph 1, Paragraph 1, Article 6 of the Fair Trade Law; that is “where an enterprise and another enterprise are merged into one”. Furthermore, both of the sales amounts of Zenitron Co. and Princeton Co. for the preceding fiscal year have exceeded the sales thresholds publicly announced by the Fair Trade Commission and met the threshold of filing application for merger as stipulated in Subparagraph 3, Paragraph 1, Article 11 of the Fair Trade Law. Thus, this merger must be filed with the Fair Trade Commission. In addition, in accordance with the provision of Subparagraph 1, Paragraph 1, Article 7 of the Enforcement Rules to the Fair Trade Law, the applicants of this merger are enterprises participating in the merger, that is, Zenitron Co. and Princeton Co., the merger application is thus accepted and processed.
3. The merger is advantageous to the integration of Zenitron Co. and Princeton Co.’s overall resources, the supply chain service of providing more complete semiconductor components to the clients is therefore speeded up, and moreover the benefits of economic scale can be strengthened and the productivity can be increased so as to cope with future industrial development and increase the competitiveness of the aforesaid companies in Asia Pacific region. On the other hand, the annual sales of Zenitron Co. and Princeton Co. for the year 2004 are respectively approximately NTD10.9 billion and NTD 4.7 billion whereas the gross industry output value for Chinese Taipei’s IC semiconductor industry is more than NTD 1.0991 trillion in 2004. The ratio of sales volume for Zenitron Co. and Princeton Co. to industry output value of semiconductor market in fact is not high. Given that there are approximately 165 semiconductors distributors in Chinese Taipei, the market competition is very intense. Also, as neither Zenitron Co. nor Princeton Co. is the top five distributors , this merger only has limited impacts on the horizontal market’s competition restraint. In conclusion, the overall economic benefit of this merger outweighs the disadvantages resulted from the market competition restraint. Accordingly, this merger shall not be prohibited pursuant to the provision of Article 12 of the Fair Trade Law.?

Summarized by Yeh, Su-Yen;
Supervised by Liou, Chi-Jung

Appendix:

Zenitron Corporation’s Uniform Invoice Number: 12401698
Princeton Technology C&C Corporation’s Uniform Invoice Number: 97290194