Taiwanese contract manufacturing giant Foxconn Technology Group will acquire Belkin International, a 35-year-old PC peripherals company, for US$866 million in cash.
In a statement, California-based Belkin said the deal, which is aimed at creating “a global consumer electronics leader”, is being made through a Foxconn subsidiary, Hong Kong-listed Foxconn Interconnect Technology (FIT, 6088.HK).
“Leveraging Belkin’s strength in research and development capabilities and the consumer products channel, FIT is expected to further tap into premium accessories and the smart home market,” and expand both companies’ presence in the United States and other key markets globally, Belkin said.
Tech media The Verge said the acquisition would be a significant upgrade in Foxconn’s brand image “from a behind-the-scenes manufacturing partner to the owner of three major consumer brands”.
The deal also means Foxconn will also be owning smart home system producer Wemo, home router brand Linksys, and Phyn, whose main product is a smart water monitoring system. Belkin also brings with it around 700 patents.
Founded in 1983, Belkin is well-known for creating an array of computer and phone accessories.
It has now more than 1,400 employees with product offerings in more than 50 countries around the world. It recorded sales of around US$789 million in the fiscal year ended Sept. 30, according to Foxconn.
The company owns rich product lines of computer and mobile accessories, such as Wi-Fi networking solutions, laptop docks, wireless chargers, and phone cases.
Chet Pipkin, Belkin’s CEO and founder, will continue to lead the company as a wholly owned subsidiary and may join FIT’s management team.
Foxconn, which is the main assembler of Apple Inc.’s iPhones, has been working to diversify its business from contract manufacturing. In 2016, founder and chairman Terry Gou bought Japanese electronics manufacturer Sharp for US$3.7 billion. He is also actively investing in artificial intelligence and big data-related technology.
The latest purchase marks another major foreign bid for a US firm, which may have to to go through a review by the Committee on Foreign Investment in the United States (CFIUS).
The US government under President Donald Trump has shot down several large-sized acquisitions, including those involving Chinese or Asian buyers.
In January, the CFIUS rejected Alibaba-owned Ant Financial’s US$1.2 billion acquisition of US money transfer company MoneyGram International over national security concerns. Last week, Trump blocked Singapore-based chipmaker Broadcom’s US$117 billion bid for Qualcomm, its American competitor, saying that the deal might impart the country’s national security.
In such a sensitive period, Gou’s pledge to build a US$10 billion LCD factory in the midwestern US state of Wisconsin may help Foxconn to stay on the good side of the Trump administration. Last year, Gou announced the massive investment plan to be completed by 2020, which promises to create at least 13,000 local jobs.
This article appeared in the Hong Kong Economic Journal on March 28
Translation by Ben Ng with additional reporting
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