Japan’s SoftBank Corp. is a significant investor in tech-focused companies while Foxconn is recognized as a leading hardware supplier in the market. But, to further accelerate their dominance in the industry, the duo is now looking forward to a joint venture.
According to a recent report from Reuters, the joint venture is soon to initiate operations which will deepen the bond between the two of the Asia’s biggest technology companies.
Following the joint venture, Foxconn will gain a 54.5 percent stake in one of SoftBank’s existing subsidiaries for a huge purchase price of $600 million. A subsidiary of Foxconn will also acquire new shares in Softbank Group Capital Apac Pte. Ltd. for a controlling stake. This will reconstruct the subsidiary to a joint venture which has been working as a wholly-owned Softbank unit for long.
The deal which is expected to proceed on 1 March will subdue SoftBank’s share to 45.5 percent. The joint venture is proposed by the companies witnessing the resemblance in thoughts. Both the groups stimulate towards investments in the technology sector and are looking for expansion the States. The fresh venture will take care of both the aspects by combining SoftBank’s investment expertise with Foxconn’s advanced manufacturing and technology services.
Foxconn and SoftBank have successfully shared platforms in the past. The Taiwanese company already manufactures Softbank’s human-like robot called Pepper. Both the companies have also worked together on investment in India.
Foxconn confirmed plans for expansion in December after having preliminary discussions for investments with U.S. officials. The disclosure from the Taiwanese manufacturer came on the heels of SoftBank CEO Masayoshi Son meeting with U.S President-elect Donald Trump later that day. The latter agreed to invest $50 billion in the States to support the creation of over 50,000 new jobs in the country. The massive investment will be cashed from the company’s $100 billion technology fund, which was launched back in October.