Lextar Electronics Corp. (“Lextar” or the “Company”) (TAIEX: 3698) and Wellypower Optronics Co. Ltd. (“Wellypower”)(TAIEX: 3080) announced that they have entered into an amalgamation agreement. The merger agreement was approved today by the Boards of Directors of both Lextar and Wellypower. The consolidation date of the merger is targeted for February 1st, 2013, at which time Wellypower will be absorbed into Lextar.  The merged entity will operate as Lexstar.  The swap ratio for Wellypower and Lextar is planned to be 2:1, based on the stock’s market value, net worth, industry status and prospects, production capacity and profits, and subject to be approved by the shareholders meeting of both companies.
 
Lextar is a vertically integrated LED company and merging with Wellypower will provide many advantages in the sales and supply chain segments. Wellypower has ample experience in LED packaging as well as in lighting product production and sales. After the merger, the LED industry will be provided with a high degree of integrated operations.  The merger will reduce repeated investment and enhance the economies of scale of production and procurement, while at the same time expand sales channels abroad. Additionally, Wellypower is one of the largest T5 tube providers for China Electric MFG. Corporation, which has its own lighting brand TOA. This means that Lextar can have a more developed relationship with China Electric and will be able to enhance mutual competitiveness in the LED lighting market.
 
Wellypower’s Chairman Allen Huang said “Wellypower has already accumulated years of ample experience in the Taiwan lighting industry. In order to accommodate international energy-conservation trends, Wellypower believes it will obtain technological and management resources after the merger, which will be beneficial in quickening the company’s transformation into an LED one. The merger will also increase the company’s competitiveness and will beneficial for stockholders.”
 
Meanwhile, Chairman of Lextar Dr. David Su said, “Lextar is one of the top three LED companies in Taiwan and is the only one throughout the island to have a vertically integrated business model. Lextar believes the integration with Wellypower will be effective and resourceful, and will help the companies maintain a competitive edge in the LED market. Lextar has resource management, production and supply chain experience with company merging back in 2010 where it merged with the largest LED backlighting maker at the time, Lighthouse. Lextar’s merger with Wellypower this time around will provide the two sides more talent and resources, and will increase Lextar’s advantages in the ever-quickening and evolving LED lighting market.”