HTC shoots down idea of a merger with Asustek

HTC has rebutted the idea that it would consider a merger with larger rival Asustek Computer after Asustek left open the possibility of some kind of a deal.

"[HTC] has not made any contact with Asus regarding this matter, and it will not consider a merger with Asus," the company said in a posting on the website of Taiwan's stock exchange, according to Reuters.

Asustek Chairman Johnny Shih recently commented on the topic in response to questions raised at the company's annual general meeting, CFO David Chang told Reuters. "Our chairman has chatted about the topic internally," Chang said. "Still, the chances of an actual takeover are not big as Asustek is a company that has depended on organic growth."

Asus later clarified it has no current investment plans in HTC, Reuters reported.

Asus was not in the top 11 handset makers in the world in 2014, according to research firm Gartner (neither was HTC). Asus, better known for making laptops, has tried to crack into the low end of the smartphone market with its ZenFone line. According to a recent HSBC report cited by Reuters, Asus could see 89 percent year-over-year smartphone shipment growth in 2015, the highest among major vendors.

HTC has been working to regain sales momentum but appears to have faltered, at least for now. Earlier this month the company said in a statement that it may incur a net loss of between $256 million (7.95 billion New Taiwan dollars) and $291 million for the second quarter. If HTC does post a net loss, it would break its streak of four straight quarters of steady if small profits. Recently, HTC has focused on selling mid-range phones in emerging markets and has slashed costs by outsourcing some of its manufacturing.

For more:
- see this Reuters article

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