The largest division of Foxconn Technology Group and the biggest electronics manufacturer in the world – Hon Hai Precision Industry Co., announced in an exchange filing that it acquired a 4.9% stake in SK C&C Co., as it plans to expand its reach beyond phones and tablet computers assembling. According to the information disclosed by the units Chairman Chey Tae-won in the exchange filing today, the deal amounted to 381 billion won (377 million dollars) for the stock of SK Holdings Co.
Foxconn said in an e-mailed statement today, cited by Bloomberg, that the investment will “benefit current operations while also supporting efforts to jointly develop new business opportunities”.
The announcement comes only a few days after Mr. Terry Gou turned to companys investors and asked to “be patient”, as the company is attempting to diversify the range of its products and services. The Foxconn unit, Hon Hai, intends to make a breakthrough in other higher-margin businesses.
Under the lead of Mr. Gou, in May this year Hon Hai Precision Industry Co. Ltd made an investment at the amounted of 11.7 billion New Taiwan dollars (392 million dollars) in a Taiwanese phone operator, in an attempt to expand its reach. The division is also planning to invest in cloud computing, electric cars and automation in order to reduce its dependence on Foxconn.
SK C&C Co., based in South Korea, operates by providing technology services that include mobile software and electronic payments. The company also has a 31.8% stake in SK Holdings Co. Ltd. The deal with Foxconn Technology Groups unit is considered to provide the latter with the opportunity to expand its products and services range and attract a larger number of new customers.
Shares of Hon Hai Precision Industry Co. Ltd were 0.10% up to close at 98.60 Taiwan dollars today, marking a one-year gain of 46.57%. According to data provided by the Financial Times, the 20 analysts offering 12-month price targets for Hon Hai Precision Industry Co. have a median target of 103.00, with a high estimate of 120.00 and a low estimate of 64.00. The median estimate represents a 4.46% increase from the last price of 98.60.
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