Liteon, a leading manufacturer of optical disc drives, and BenQ, a manufacturer of various computer components, announced merge of their optical drive businesses. As a result of the transaction, Liteon will acquire optical disk drive business from BenQ and will command approximately 27% of the whole market.

Liteon will pay BenQ about $153.4 million (NT$5 billion) in cash and shares. BenQ is expected to obtain approximately $36.8 million (NT$1.2 billion) of cash from the merger, as well as 13% shareholding and two seats of board directors of Liteon, making it the second largest shareholder of the latter, according to China Economic News Service (CENS)?agency.

Liteon will be able to produce about 80 million of optical disk drives with additional manufacturing capacities it gets from BenQ. The company believes that already this year its market share in the ODD market will rise to 26%-27%. Liteon currently has capacity to produce 4-5 million ODDs a month and will have additional monthly capacity of 2 million ODDs from BenQ to attain a capacity of 6-7 million ODDs a month, DigiTimes web-site reported.

BenQ shipped about 25 million ODDs last year, including 7 million units under the BenQ brand. This year, BenQ aims to sell 10 million own-brand ODDs, with production to be outsourced to Liteon the web-site quoted executives of BenQ as saying.

By acquiring the optical storage department of BenQ, Liteon will obtain the patent licensing of Philips, leading to reduction in its royalties outlays, CENS noted.