Prodisc and Optodisc merge to form UPO Holding Corp

Prodisc Technology the manufacturer of DVD+R/-R media
and its rival Optodisc Technology both among the top 5 media producers in Taiwan have agreed to merge. The companies will now be held under a new holding company called UPO Industrial Holding Corporation. The two companies will convert their shares in to those of UPO and will then by subsidiaries of the UPO holding company. The UPO corporation will have a capital of NT$20.0 Billion (US$603million), the holding company is planned to for establishment in January 2006.

The merger of both companies will save both companies in R&D (Research and Development) and buying costs said Prodisc's president. He went on to say that the companies will be able to complement both product portfolios and clienteles.

While Prodisc concentrates on DVD+R/-R discs for OEM clients, Optodisc markets DVD+RW/-RW/RAM discs to distributors in clone markets. The combined capacity of both Optodisc Technology and Prodisc Technology will mean the new company will be able to output 100 million DVD+R/-R discs, six million DVD+RW/-RW discs and one million DVD-RAM discs a month.

Prodisc Technology and Optodisc Technology, among the top five producers of optical discs in Taiwan, on October 3 jointly announced their merger through a new holding company, UPO Industrial Holding Corporation.Prodisc and Optodisc will convert their stock shares into those of UPO to become 100% owned subsidiaries of the holding company. UPO will have authorized capital of NT$20.0 billion (US$603 million) and initial paid-in capital of NT$7.76 billion (US$234 million), with a January 2, 2006 date tentatively set for its establishment. By merging, the two companies will save in R&D and procurement costs, according to Prodisc president Tony Hsu. In addition, the merger can combine the two companies' complementary product lines and clienteles. Prodisc focuses on DVD+R/-R discs for OEM clients while Optodisc mainly ships DVD+RW/-RW and DVD-RAM discs to distributors in clone markets, Hsu pointed out. Prodisc and Optodisc have a combined monthly production capacity of 100 million DVD+R/-R discs, six million DVD+RW/-RW discs and one million DVD-RAM discs. In response, CMC Magnetics, and Ritek, the two top makers of optical discs in Taiwan, reacted positively to the merger saying that consolidation in the industry would be good for the over all health of the optical disc industry.

Source: Digitimes