TAIPEI Taiwan's HTC Corp will not consider a merger with larger rival Asustek Computer Inc, HTC said on Monday, responding to comments made by Asustek's head during its annual general meeting.
"[HTC] has not made any contact with Asus regarding this matter, and it will not consider a merger with Asus," the company said in a posting on the website of Taiwan's stock exchange.
Asus chairman Johnny Shih said last week the company would not rule out the possibility of acquiring the struggling smartphone maker. Its chief financial officer later told Reuters Shih had "chatted about the topic internally."
Asus later clarified it has no current investment plans in HTC.
HTC has suffered a steep fall in its stock price since downgrading its earnings outlook for the current quarter. Shares rose by the 10 percent market limit on Monday, however, in response to the buyout speculation.
The firm, which once sold one in 10 smartphones globally, has seen its market share dwindle in the face of heated competition from Apple Inc and Samsung Electronics Co Ltd.
Asus, more well-known as a laptop brand, has been making inroads into the smartphone market with its ultra low-priced ZenFone series.
According to a recent HSBC report, Asus could see 89 percent on-year smartphone shipment growth in 2015, the highest among major vendors.
(Reporting by Michael Gold; Editing by Muralikumar Anantharaman)