Asus Chairman Says Considering Acquisition of HTC

HTC saw its shares drop to their lowest level in more than a decade after the companyforecast its biggest-ever quarterly loss due to less-than-expected demand from the Chinese market. Now, the company seems to be under scanner for a possible acquisition by fellow Taiwan-based company, Asus.

The Asus chairman sparked HTC takeover speculations during the company’s annual general meeting earlier this week. Johnny Shih, Asus Chairman, while replying to a question about a possible HTC acquisition, replied saying the company has not ruled out the option of acquiring HTC.

David Chang, Chief Financial Officer also confirmed that Asus had internal discussions on acquisition of HTC. Chang told Reuters, “Our chairman has chatted about the topic internally.” He however stressed that Asus has been looking to grow organically, making the possibility of HTC acquisition slim.

Chang said, “The chances of an actual takeover are not big as Asustek is a company that has depended on organic growth.”

HTC late last week revised its second quarter guidance and blamed the slow demand for high-end Android smartphones alongside weaker than forecast sales in China. The company predicted sales slide to TWD 33 billion-TWD 36 billion ($1.06 billion-$1.16 billion), a steep drop from the previous forecast range of TWD 46 billion- TWD 51 billion.

Back in April, HTC had estimated lower-than-expected revenue in the second quarter after a disappointing launch of its new One M9 and One M9+ models.

Asus, on the other hand, has seen some a resurgence in the smartphone segment with the popularity of its first-generation ZenFone series smartphones. The company this year launched ZenFone 2 with several SKUs to cater to different price segments.

Source-NDTV