Edimax Technology, a Taiwan-based maker of wireless networking/communication devices on an ODM basis and for Edimax own-brand sale as well, on December 22 announced the planned acquisition of a 43.66% stake in fellow maker Comtrend to set up strategic cooperation.

The acquisition will be done through a stock swap and cash investment, Edimax indicated. Edimax will issue 9.989 million new shares for exchange of 16.382 million Comtrend shares equivalent to 26.20% stake and additionally purchase 10.921 million Comtrend shares equivalent to 17.46% stake at NT$12.23 per share, resulting in a total of 43.66% stake, Edimax pointed out. With the acquisition to be legally finished on February 25, 2011, Edimax will become the largest corporate shareholder of Comtrend.

Comtrend markets broadband CPE (customer premises equipment) including XDSL routers, IADs (integrated access devices), IP set-top boxes, power line Ethernet adapters under its own brand Comtrend, with European telecom carriers being major clients for about 70% of its total revenues, Edimax indicated. As Comtrend's technology, product line, operating resource and client base are complementary to Edimax's, the strategic cooperation is to integrate them, Edimax pointed out.

Since Comtrend does not have in-house production capacity, Edimax will be responsible for the former's outsourced production and therefore will expand its production capacity in southern China by 100% in the first quarter of 2011, Edimax indicated.