OLED industry consolidates

Innolux has acquired two companies TPO and CMO (Chi Mei Optoelectronics). According to the various press releases this is a 3-way-merger that is expected to be completed by 30 April 2010.

Under the terms of the agreement, CMO and TPO will exchange their common shares for the common shares of Innolux. CMO will exchange 2.05 common shares for each Innolux common share, while TPO will exchange 8 common shares for each Innolux common share (after capital reduction conducted by TPO later this year, the exchange ratio of TPO to Innolux will be approximately 3.83: 1).

Innolux will be the surviving entity, and will be re-named Chimei Innolux Corporation (“Chimei Innolux”). After the completion of the merger, the capital of Chimei Innolux will amount to NT$72.9 billion.

This transaction will be the largest merger within the TFT LCD industry globally. The combination creates a vertically integrated leader that will drive the evolution of the TFT LCD value chain.

What is also of interest is both TPO and CMO have active OLED research and development programmes. CMO is already established as a manufacturer of OLED based displays, and has been for a number of years ago. CMO also produces one of the largest OLED display on the market at 7.6-inch. However, it has been rumoured that the facility has not been operating at full capacity. TPO has yet to begin manufacturing.

CMO holds a Kodak AM-OLED licence, signed in May 2007. It will be interesting to see how this merger will impact future Research and Development and manufacturing of OLED products.

With the recent sale of Kodak OLED business to LG, 2010 could turn out to be an interesting inflexion point for the OLED industry.

www.innolux.com www.cmo.com.tw www.tpo.biz

LG / Apple / DELL maybe

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