Date Announced: 26 Aug 2014
DURHAM, N.C.--(BUSINESS WIRE)--Cree, Inc. (CREE), a market leader in LED lighting, and Lextar Electronics Corporation (TAIEX:3698), today announced that the companies have entered into an agreement whereby Cree will make an investment in Lextar and the companies will enter into a supply agreement for sapphire-based LED chips. As part of the agreement, Cree will invest approximately $83 million to purchase 83 million Lextar shares at a price of NT$30 per share. Lextar and Cree will also enter into a long-term LED chip supply agreement, as well as a royalty-bearing license agreement for certain Cree LED chip and component intellectual property. Upon closing of the investment, Cree will own approximately 13% of Lextar.
“We are excited to be strengthening our relationship with Lextar to enable growth in LEDs and Lighting,” stated Chuck Swoboda, Cree Chairman and CEO. “Working with Lextar to supply high quality mid-power LED chips enables Cree to focus its resources on the high performance, high-power LED chips that differentiate Cree LEDs in the market. This approach provides the operational and financial flexibility to help Cree achieve the best return on our people and invested capital.”
“Lextar has established a strong technology position and customer base in the mid-power backlighting LED segment, while Cree has had outstanding performance in the high-power LED component and lighting markets,” said Dr. David Su, Chairman and CEO of Lextar. “We are very excited about this new cooperation with Cree. We strongly believe this new collaboration will increase the competitiveness of our products and technology, enabling both companies continued growth in the LED lighting market. Furthermore, the cross license of LED chip and component intellectual property will afford both Cree and Lextar the benefits from our product and technology development, thereby strengthening our mutual competitiveness in the global LED industry.”
The agreement has been approved by the boards of directors of both companies, and is targeted to close in Cree’s second quarter of fiscal year 2015, subject to the approval of Lextar’s shareholders and the Taiwan Investment Committee, and other customary closing conditions.
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