Rumor: Hon Hai to buy Quanta

Unless you keep an eye on Taiwanese OEM manufacturers, the names "Hon Hai" and "Quanta" probably don't mean much to you. However, if you happen know a thing or two about the magical island where iPods and laptops are born (sorry kids, I'm not talking about Santa's Workshop), you'll know that Hon Hai and Quanta are two of the world's largest manufacturers of shiny gadgets of all stripes. And if the latest rumors offer any indication, they're about to get a lot bigger. Forbes is reporting that Quanta CEO Michael Wang has left the company due to a recent change of strategy, "in particular a plan by founder and Chairman Barry Lam to sell part of the company to Hon Hai Precision." Apparently, Hon Hai, well known for its close relationship with Apple, wants a larger slice of the OEM laptop market and considering Quanta's large laptop manufacturing contracts with HP, Dell and Apple, it's not surprising why a buyout might be one possibility. Still, as Forbes duly notes, "analysts in general do not expect a full-fledged merger between Quanta and Hon Hai so much as some sort of a strategic equity alliance between the two...such as an all-stock merger involving a pricing ratio based on every 2.5 Quanta shares for one Hon Hai share."

For more on the possible merger:
- see this Forbes story