Hon Hai acquires 4.9% stake in SK C&C Co; to diversify beyond contract manufacturing
30 Jun 2014
Hon Hai Precision Industry Co, the biggest unit of Terry Gou's Foxconn Technology Group, has acquired a 4.9-per cent stake in SK C&C Co as it sought to make a foray beyond assembling phones and tablet computers, Bloomberg reported.
In an exchange filing today, the company said it paid 381 billion won ($377 million), or for the stock from SK Holdings Co chairman Chey Tae-won.
Gou, who last month led a New Taiwan $11.7 billion ($392 million) investment in a Taiwanese phone operator, was expanding into electric cars, cloud computing and automation to cut Foxconn's reliance on Apple as an assembler of its products.
The mainstay of the revenues of the company had been iPhones and iPads, with the Cupertino, California-based company accounting for almost half its revenue.
The investment will ''benefit current operations while also supporting efforts to jointly develop new business opportunities,'' Foxconn said in a statement today.
The move is the company's second merger in less than two months, as it seeks to diversify away from the contract manufacturing business.
In a separate regulatory filing, SK C&C said Chey Tae-won, the chairman of SK Holdings and biggest shareholder of SK C&C, was the seller.
This brought down the stake of Chey from 38 per cent to 33.1 per cent in SK C&C, through which he controlled SK Holdings and other units including the world's second-biggest chipmaker, SK Hynix Inc.
Reuters quoted an SK Group spokeswoman as saying, that Hon Hai was considering expanding its business portfolio into information communication technology-centred services, and the fact that they chose SK C&C as their partner was positive.
Foxconn Technology Group, Hon Hai's parent company said late in May it would acquire a stake in Taiwanese mobile telecoms operator Asia Pacific Telecom for NT$11.6 billion ($390 million) in a deal that would expand its presence in Taiwan's fledgling 4G telecom market.
