Taiwanese LED chip supplier Formosa Epitaxy Inc has announced to intend to issue as many as 120 million new shares at NT$19.6 per share to China’s Sanan Optoelectronics Co.by a private placement.

Through the NT$2.35 billion (US$80.8 million) deal, Sanan Optoelectronics will acquire 19.9 percent of Formosa Epitaxy via its 100-percent owned Xiamen subsidiary and will become the firm’s largest shareholder, ahead of Japan’s Mitsui & Co, which holds 15 percent.

According to Formosa Epitaxy said in a filing to the Taiwan Stock Exchange, the two sides will formally sign a share subscription agreement, to take effect after gaining approval from their respective shareholders. The transaction is still subject to regulatory approval. The firm is scheduled to hold a special shareholders’ meeting on Jan. 3 to seek approval for the sale.

Formosa Epitaxy said the new capital from Sanan Optoelectronics, which is primarily engaged in full-color high-brightness LED wafer and chip manufacturing, would help strengthen its financial position, expand its business scale and enhance its competitiveness.