Acer cuts BenQ's cord

After much talk of disagreement between Acer and sister company, BenQ, the two are finally splitting

Acer is finally severing relationships with its one-time sister company, BenQ.

According to reports, the split will end a period of rivalry — at times acrimonious — between two of the main movers behind Acer, the Taiwanese giant of the PC business.

Shih has since left two of his former executives to run the businesses. But as long ago as 2003 it emerged that Acer's chief executive, now chairman, JT Wang, and his counterpart at BenQ, KY Lee, did not get on. Since then, BenQ has diversified into the mobile phone business, through its purchase of Siemens Mobile in October last year, and — worse from Acer's point of view — into the PC business.

While Acer retained a major stake in BenQ it had its own representation on the board, Stan Shih, but it has been reported that he left the board last week. Acer began selling off its shareholding in BenQ last year when it sold 50 million shares, according to a statement from the company, and it plans to sell another 50 million this year, according to InfoWorld.

"Acer has been disposing of its non-core business investments as part of the company's strategy to focus on our core business — IT products. We haven't announced yet when we plan to sell the next quantity of BenQ shares," an Acer representative told InfoWorld. Acer's shareholding in BenQ currently represents around 7 percent of the company.

Acer is doing well in its own right with revenue />growth of 31.6 percent in the first quarter of 2006, to $973m, and sales growth of 26.4 percent to $2.56bn in the same quarter.