A leading Chinese maker of energy-saving light bulbs plans to invest Tw$2.35 billion ($81 million) in a Taiwanese peer, in the biggest single investment from China, the companies and officials said Tuesday.
Formosa Epitaxy, a supplier of LED (light emitting diodes) chips, said in a statement that it planned to sell up to 120 million new shares at Tw$19.6 per share to a subsidiary of China's Sanan Optoelectronics.
Sanan Optoelectronics, a maker of LED products and solar energy products, will become the Taiwanese firm's largest shareholder with a 19.9 percent stake after the deal is finalised.
The two firms were set to sign a share subscription agreement on Tuesday that will take effect after gaining approval from their respective shareholders, Formosa Epitaxy said.
The deal, also pending regulatory approval, is set to become the biggest single investment by a Chinese firm since Taiwan relaxed rules on mainland investment in 2009, said Taiwan's Investment Commission.
In the period from mid-2009 until the end of September 2012, Taiwan had approved a total of 303 investment cases by Chinese firms totalling $315 million, according to the commission.
Ties with China have improved markedly since Beijing-friendly Ma Ying-jeou became Taiwan's president in 2008, leading to the signing of 18 agreements to boost trade and investment.
Officially, Beijing still views Taiwan as part of its territory awaiting reunification, by force if necessary. The two sides have been governed separately since they split after a civil war in 1949.