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Taiwan's Giant quashes rumor of buyout by China's Ofo

World's no.1 bicycle-maker says it is not seeking buyers

Taiwan bike-maker Giant denies takeover offer from Chinese startup Ofo. (Photo by Cheng Ting-fang)

TAIPEI -- Giant Manufacturing, the world's largest bicycle maker, on Monday rebutted recent reports in Chinese media that Beijing-based bike rental startup Ofo was planning to acquire the 45-year-old Taiwanese company.

"Those reports were complete market rumors," Giant spokesperson Ken Li told Nikkei Asian Review on Monday. "We absolutely have no such plan to either accept investment or seek to be acquired by outside investors or companies."

Li also denied there had been any discussion between his company and Ofo about a possible buyout.

China's media reported that Cheng Wei, the founder of the country's leading ride-hailing service Didi Chuxing and a board director of Ofo, told participants at a forum that Ofo may take over Giant.

Didi has a stake in three-year-old Ofo.

Giant already shot down speculation concerning its possible acquisition in an exchange filing last Friday. Ofo was not immediately available for comment.

Asked whether Giant was worried about the possibility of a hostile takeover, Li said Chinese investors could face intense regulatory scrutiny in Taiwan.

Giant has an existing partnership with Ofo. The Taiwanese bike-maker is readying 600,000 bicycles for the Chinese startup, according to Li, though he said Ofo is no different from any other customers.

Those Ofo bikes will be made in Giant's facilities in the Chinese cities of Tianjin and Chengdu.

The Taiwanese bike company makes around 6.6 million bikes every year on average, mostly for its own brands, Giant, Liv and Momentum.

Founded in 1972, Giant has grown over the past four decades into a world leader, with more than 12,000 dealers in 80 countries and a market capitalization of around $2.2 billion, higher than Ofo's current valuation of $2 billion.

The company's founding Chairman King Liu and longtime Chief Executive Tony Lo passed their torches last December respectively to Bonnie Tu and Young Liu, King Liu's niece and son.

For all of 2016, Giant generated 57.09 billion New Taiwan dollars ($1.89 billion) in revenue, down 5.5% from a year ago, due to a China slowdown.

"Although Ofo's interest in Giant may just be rumor, the Taiwanese bike giant should pay heed to the fact that new tech startups could disrupt old industries," said Johnson Wang, an analyst at Taiwan Institute of Economic Research.

Wang added that if Ofo continues to do well and dominate China's growing bike-rental industry, the Chinese company could become very rich in two to three years and could attempt to buy global brands to provide premium services.

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