Study of share conversion ratio on AU Optronics Corp.‘s(AUO) merge with Quanta Display Inc.(QDI).

• Main Authors: Hsieh Chih-Yen, 謝志彥
• Other Authors: Gong Shang-Chi
• Format: Others
• Language: zh-TW
• Published: 2007
• Online Access: http://ndltd.ncl.edu.tw/handle/09430068366042825074

碩士 === 輔仁大學 === 科技管理學程碩士在職專班 === 95 === The Taiwanese TFT industry currently ranked amongst the largest in international industries, injects huge capital for the generation 7.5 and generation 8 TFT panel factories. Presently, the Taiwanese TFT organizations trend is heavily reliant on mergers to increase their economic scale and lower production costing to overcome malicious competition and enlarge their global market share. With the hopes of using these merger tactics to enable them to attain global market player positioning following examples set by the previously successful Taiwanese semiconductor mergers. The Taiwanese electronic industry mergers and its trend are mostly based on share transformations. However, how is merger share ratio defined? Where would it be deemed reasonable for parties? This poses as one of the biggest concerns. On top of that, what are the risks involved for indirect parties like shareholders, finance houses and even government? So these merger trends have a cause for concern. The prospectuses, provided by the organizations, do not give enough indication regarding the share ratio implemented for the merger, creating a controversial debate amongst all indirect parties involved. Hence, my thesis is based on the merger details of two major listed Taiwanese-based TFT panel-producing (TFT) companies, namely AU Optronics (AUO) and Quanta Display Inc. (QDI). My highlights will be based on cost, market value and free cash flow approaches. Following that, a breakdown of the share ratio involved in the merger from a financial and strategic standpoint, and finally, consolidation of all of the above for a conclusion. The conclusions of this study shows that new AUO’s free cash flow is bigger than old AUO plus QDI ,which means , this acquisition has synergy on it .From cost approach point of view, reasonable share conversion ratio is 1：2.5 .From market value approach point of view ,reasonable share conversion ratio is 1：5.Comparision with actual conversion ratio 1：3.5,the differentiation of above two approaches is the extra value that AUO willing to merge QDI.