July 22, 2016
Taiwan-based Arima Communications and Finland-based Elcoteq have agreed to suspend deadlocked merger talks in favour of working together, according to sources at Taiwan-based news site Digitimes.
Arima designs and manufactures mobile phone handsets for big brand names, whilst Elcoteq designs and manufactures electronic components for handsets.
The two companies have been engaged in merger talks for the past three years. Arima wants to purchase the parts of Elcoteq relevant to handset production, whilst Elcoteq would prefer to sell all of its assets in a bundled deal.
Merger talks have now been suspended so that the companies can team up to manufacture low-cost handsets for LG Electronics.
Arima has won the contract to manufacture several million low-cost LG handsets targeting the Latin American market, and will move production of these handsets to Elcoteq’s factory in Brazil.