Foxconn Technology Group, a subsidiary of Hon Hai Precision, is expected to close the acquisition of 54.5 per cent of SoftBank Group Capital APAC for $600 million, on March 1, to jointly make investments under the leadership of Foxconn.
The Softbank Group (SBG) unit will accordingly issue 96,268 new shares to Foxconn to create a joint venture.
“As a result, SoftBank Group Capital APAC is expected to become an equity method associate of SBG and no longer qualify as an SBG subsidiary,” the Japanese company said in a filing.
The synergy is expected to convey new insights into, as well as enable the parties to demonstrate their competitiveness in, investment activities, leveraged by SoftBank’s investment expertise and Foxconn’s global network.
Just last year, it participated in a spate of funding rounds for companies across Asia, including China’s ride-sharing app Didi Chuxing, India’s messaging app Hike Messenger, Hong Kong’s incubator Tink Labs and bike rental startup Mobike.
The JV is not the first investment partnership between the two Asian giants, as Foxconn is one of the investors in Softbank’s $100 billion Vision Fund. Apple, which is importing phones produced by Foxconn, is also a contributor.
Foxconn and Softbank are also JV partners of SBG Cleantech, along with India’s Bharti Enterprises, which was founded in 2015 to invest in renewable energy projects in India.
Since earlier this year, both firms have been actively eyeing expansions in the US, with Foxconn planning to build a $7 billion display factory, and Softbank looking to fund office-sharing startup WeWork with $3 billion and buy NYSE-listed Fortress Investment Group for $3.3 billion.