SoftBank, Foxconn to Deepen Ties With Joint Venture
Japan's SoftBank Group and Taiwan's Foxconn will soon begin operating a joint venture that deepens ties between two of Asia's biggest technology companies, they said on Friday. The move will give Foxconn, formally known as Hon Hai Precision Industry Co, a 54.5 percent stake in one of SoftBank's existing subsidiaries for $600 million (roughly Rs. 3,998 crores) and comes as both groups step up investments in the technology sector and consider expansion in the United States. Under the arrangement, a subsidiary of Foxconn will buy new shares in SoftBank Group Capital Apac Pte Ltd for a controlling stake, transforming what had been a wholly-owned SoftBank unit into a joint venture, the companies said. The deal is expected to take effect on March 1, reducing SoftBank's holding to 45.5 percent. The joint venture will invest in initiatives that will integrate SoftBank's investment expertise and Foxconn's advanced manufacturing and technology services, Foxconn said, adding that it will manage the operation. Foxconn already makes SoftBank's human-like robot Pepper. The Taiwanese company is a a major supplier for Apple and is parent to Sharp, the Japanese manufacturer of liquid crystal display (LCD) screens, in which it bought a two-thirds stake last year. SoftBank owns stakes in many companies, including US telecoms carrier Sprint Corp and Chinese e-commerce giant Alibaba. Foxconn founder Terry Gou and SoftBank Chief Executive Masayoshi Son, both among Asia's richest men, have done business together for years. In December plans from the two companies on the possible expansion of investment in the United States were revealed after a meeting between Son and Donald Trump shortly after Trump was elected as US president. Gou later said the outlines of the investment presented to Trump were from a telephone call he and Son shared before the meeting. The companies have also worked together on investment in India.