VANCOUVER, British Columbia -- Nam Tai Electronics Inc. has merged two of its subsidiaries, Nam Tai Electronic & Electrical Products Ltd. and Namtek Software Development Co. Ltd.

NTEEP has entered into a sale and purchase agreement with Nam Tai and Asano Co. for the acquisition of 80% and 20% interests in Namtek, respectively. The total cost of the acquisition is approx. $26.7 million, and will be satisfied by issuance of new shares of NTEEP to Nam Tai and Asano. The merger should be complete by the end of May 2005.

" We believe the merger of NTEEP and Namtek will enable the company to simplify its corporate structure, strengthen its management team, which will in turn support its continuous growth," said Joseph Li, CEO of Nam Tai. "Integration of NTEEP's manufacturing capability with Namtek's software development capability will result in significant competitive advantages. By sharing resources, the two operations will also be able to achieve higher operational efficiency, capabilities, profitablities and scalabilities."

Namtek offers a range of services on software development, data processing and compression and electronic hardware design and development, specializing in digital dictionaries and car navigation systems. It will become a wholly owned subsidiary of NTEEP after the acquisition is completed.