Japan's Softbank Group and Taiwan's Foxconn (known as Hon Hai Precision Industry Co before this) on 24th Feb 2017 announced they would operate a JV together, deepening ties between Asia's largest technology firms.
Move will give Foxconn 54.5 percent in Softbank's existing subsidiary for USD 600 million; this comes as both groups step up investments in technology sector and consider expansion in the US.
Under the arrangement, a unit of Foxconn will invest $600 million for a majority stake in Softbank Group Capital Apac Pte Ltd.
This will be effectively transforming what had been a wholly-owned Softbank unit into a joint venture.
In December plans from the two companies on possibly expanding investment in the United States were revealed after a meeting between billionaire Softbank CEO Masayoshi Son and Donald Trump.
Foxconn is taking over SoftBank’s Asia-based tech investment fund.
The manufacturing giant, which is responsible for producing Apple’s iPhone among many other tech products, has agreed to buy a majority 54.5 percent stake in SoftBank Asia Capital in exchange for $600 million, according to a filing.
The deal is scheduled to go through March 1, after which time SoftBank Asia Capital will no longer be a SoftBank affiliate. A SoftBank representative confirmed that the agreement will see Foxconn become the decision maker on investments for the fund.
Foxconn itself said the fund would blend SoftBank’s investment expertise with its leadership in advanced manufacturing and technology services and global presence.
The establishment of this joint venture is in line with Foxconn’s overall investment strategy and will enable the company to explore and tap new investment opportunities that will drive Foxconn’s sustainable business development.
The Taiwan-headquartered company may be synonymous with production, but it is no stranger to doing deals.
Its investments include India-based chat app Hike, China’s top ride-sharing firm Didi Chuxing, selfie app and selfie phone maker Meitu, 360 degree camera maker Lytro, and hot Chinese bike rental startup Mobike.
Foxconn is one LP in SoftBank’s new Vision fund, which also includes contributions from Apple, Qualcomm and Oracle co-founder Larry Ellison’s family office.
The Vision Fund is targeting a $100 billion raise, and real estate startup WeWork may be one of its first deals.
Softbank: Know More- Founder: Masayoshi Son
- Founded: 3 September 1981, Tokyo, Japan
- Headquarters: Minato, Tokyo, Japan
- Revenue: 9.15 trillion JPY (2015)
- Subsidiaries: Yahoo! Japan, SOFTBANK CORP., Sprint Corporation, GungHo Online Entertainment Inc
