For years, Taiwan-based Foxconn has been best-known for manufacturing Apple products, but it also builds countless other consumer electronics. Today, one of the company's subsidiaries (Foxconn Interconnect Technology) announced it is purchasing US-based Belkin for $866 million in cash. Belkin owns a number of major brands, including Linksys and Wemo.
The buyout would make Foxconn a major player in consumer electronics, instead of just a contract manufacturing company. Belkin primarily sells phone/tablet accessories, but also manufactures networking equipment like routers and Wi-Fi range extenders. The company also sells a range of smart home products under the Wemo brand, like the smart switches we reviewed earlier this year.
According to The Financial Times, the purchase is subject to approval from the US Committee on Foreign Investment. In other words, there is a very real chance the acquisition could be blocked. President Trump blocked Broadcom's acquisition of Qualcomm earlier this month, based on advice from the committee.
Belkin's router business is likely to gather scrutiny from government officials, especially since they aren't particularly secure to begin with. Foxconn pledged to build a $10 billion factory in Wisconsin last year, which could help seal the deal, but that agreement has also drawn criticism. The state provided Foxconn over billion in incentives, and allowed the company to skip environmental impact studies.
PRESS RELEASE
TAIPEI and LOS ANGELES – March 26, 2018 – Foxconn Interconnect Technology Limited (FIT) (HKG: 6088), a subsidiary of Hon Hai Precision Industry Co., Ltd., and Belkin International, Inc. (Belkin®, Linksys®, Wemo®, Phyn® brands) jointly announced today the signing of a definitive agreement under which FIT agreed to acquire Belkin International for approximately US$866 million in cash, creating a global consumer electronics leader.
Leveraging Belkin’s strength in research and development capabilities and the consumer products channel, FIT is expected to further tap into premium accessories and the smart home market. The transaction would also fuel the growth of Belkin’s portfolio of brands and products and supports further investment in research and development and engineering to expand FIT and Belkin’s presence in the U.S. and key markets globally.
“FIT is excited to acquire Belkin and its capabilities in the premium consumer products space,” said Sidney Lu, CEO, FIT. “Integrating Belkin’s best-in-class capabilities and solutions into FIT, we expect to enrich our portfolio of premium consumer products and accelerate our penetration into the smart home.”
“This move will accelerate our vision of delivering technology that makes the lives of people around the world better, more convenient and more fulfilling. I am thrilled to take our brand portfolio of Belkin, Linksys, Wemo and Phyn to new heights,” said Chet Pipkin, CEO and founder, Belkin International. “We see significant synergies with FIT, including leveraging its world-class manufacturing capability to enhance Belkin’s operating efficiency and competitiveness. The transaction also grants us access to more resources to invest in our people and to aggressively pursue opportunities in the marketplace.”
Belkin International and its family of brands will continue to operate as a subsidiary of FIT under the leadership of CEO and founder Mr. Pipkin and his executive team. Mr. Pipkin is expected to join FIT’s management team.
About Foxconn Interconnect Technology Limited
Foxconn Interconnect Technology Limited (FIT), a subsidiary of Hon Hai Precision Industry Co., Ltd., trading as FIT Hon Teng Limited, focuses on the development, manufacturing and marketing of electronic and optoelectronic connectors, antennas, acoustic components, cables and modules for applications in computers, communication equipment, consumer electronics, automobiles, industrial and green energy field products.
About Belkin International, Inc.
At Belkin International, Inc., we make people-inspired products that harness the power of technology to connect the dots between people and the experiences they love. Our award-winning product lines include Wi-Fi networking solutions for the home and business; mobile accessories for laptops, smartphones, tablets; home energy management, home automation and intelligent water solutions; plus, a broad range of connectivity and power products. Belkin International, Inc. is the parent organization to the Belkin, Linksys, Wemo and Phyn brands. A privately held company founded in 1983, Belkin has more than 1,400 employees with products sold in more than 50 countries around the world. Headquartered in Playa Vista, California, Belkin International, Inc., and its brands can also be found on the Web at www.belkin.com, www.linksys.com, www.wemo.comand www.phyn.com
Source: The Verge, The Financial Times
