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Salcomp sees chance in Flextronics' Friwo deal

Fri Feb 8, 2008 10:01pm IST
 
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HELSINKI, Feb 8 (Reuters) - Finland's Salcomp (SAL1V.HE: Quote, Profile, Research) said on Friday it sees no threat from contract manufacturer Flextronics International's (FLEX.O: Quote, Profile, Research) planned purchase of the Finnish firm's main rival, Friwo Mobile Power.

Flextronics said on Thursday it would acquire mobile phone charger making unit Friwo from Germany's CEAG (CEAG.DE: Quote, Profile, Research) in a deal worth about $85 million by the end of June.

"This is not a radical change. We see it more as an opportunity," Salcomp Chief Executive Markku Hangasjarvi told Reuters.

"The six-month or so process before deal finalisation is always a difficult period, with the integration period on top of that, so we will try to use that time to grow our business."

Salcomp is one of the world's largest maker of mobile phone chargers by sales, with global market share of 24 percent. It sells chargers to Nokia (NOK1V.HE: Quote, Profile, Research) and other handset makers.

Hangasjarvi said he does not expect Flextronics to slash its prices in an effort to gain more market share.

"They (Friwo) already have about 25 percent market share and it is not in customers' interests for them to increase that. All customers want to have three or four charger suppliers. It is difficult for any single player to increase their market position," he said.

Hangasjarvi said expected Flextronics to keep Friwo's three plants operational.

"I don't think Flextronics would have paid such a sum if it didn't want to continue the business," he said.  Continued...

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