Lextar Electronics and Wellypower will merge LED and lighting businesses

Lextar Electronics and Wellypower Optronics have announced plans to merge effective February 1, 2013 and the combined LED manufacturing capacity will create the second largest LED maker in Taiwan.

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The boards of directors of Lextar Electronics and Wellypower Optronics have approved a merger in which the latter will be absorbed into Lextar. The merger, based on a stock swap of two Wellypower shares for one Lextar share, is targeted for completion on February 1, 2013. Both companies manufacture LEDs, among other things, and the combined operations will make Lextar the second largest LED maker in Taiwan trailing only Epistar.

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Lextar omnidirectional LED A-lamps

Lextar is a vertically integrated manufacturer of LEDs and solid-state lighting (SSL) luminaires and lamps. Wellypower makes a range of LEDs from back-light centric components to high-power LEDs and chip-on-board products. Wellypower is also a leader manufacturer of fluorescent lighting products including T5 tubes. The LED operations of the two will allow a net reduction in manufacturing expense while expanding sales channels.

"Lextar believes the integration with Wellypower will be effective and resourceful, and will help the companies maintain a competitive edge in the LED market," said David Su, chairman of Lextar. "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."

Lextar is a subsidiary of AU Optronics, while Au Optronics is also an investor in Wellypower. Lighting manufacturer China Electric is also an investor in Wellypower and a partnership between the two includes Wellypower supplying T5 tubes for the China Electric TOA brand. Lextar will now also have a closer relationship with China Electric with the company saying they "will be able to enhance mutual competitiveness in the LED lighting market."

For Wellypower, the merger offers the company immediate access to a deeper LED technology portfolio at a time when the lighting industry is transitioning to SSL. While the company sells packaged LEDs, it buys the chips and specializes in the packaging.

"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," said Allen Huang, chairman of Wellypower. "The merger will also increase the company’s competitiveness and will [be] beneficial for stockholders."

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