Nov 12, 2019 (China Knowledge) - China’s air-conditioner giant Gree Electric Appliances (000651) has agreed to acquire a 4.8% minority stake in LED and semiconductor manufacturer Sanan Optoelectronics (600703) for RMB 2 bln (USD 285.3 mln). This deal is expected to help Sanan to increase its production of semiconductors.
Founded in 1993, Sanan Optoelectronics is headquartered in Xiamen, China and manufactures semiconductors, LED chips and wafers, solar cells and photodiodes. The company also conducts research and development into areas such as light emitting diode and solar power.
In addition to the RMB 2 bln from Gree Electric Appliances, Sanan will obtain RMB 5 bln (USD 713.7 mln) from Changsha municipal investment fund. The company will invest the funds raised in the R&D of its LED chips and semiconductors, as well as upgrade its production plants and facilities. These investments will help Sanan to increase its production of semiconductors and LED chips.
Gree Electric Appliances’ investment in Sanan is expected to bring the company benefits in the long-run. With the increase production and subsequent supply of semiconductors, Gree Electric Appliances will be able to reduce risks in its own production of air-conditioners and intelligent appliances.
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