Japan's SoftBank Group Corp and Taiwan's Foxconn have agreed to form a joint venture, as the two large Asian technology companies expand their ties.
The arrangement involves Foxconn buying a 54.5% stake in SoftBank Group Capital Apac Pte Ltd, a wholly owned SoftBank unit, for $600 million, the two companies said in a statement on Friday.
SoftBank Apac is currently led by Alok Sama, the Indian-origin executive who joined the Japanese telecom and Internet conglomerate in 2015.
The deal, which is likely to take effect on 1 March, deepens the relationship between SoftBank and Foxconn, and comes at a time when they are both looking to expand in the US after Donald Trump took over as president.
Foxconn is a major supplier for US technology giant Apple Inc while SoftBank owns a stake in US telecom operator Sprint Corp. Foxconn said the joint venture will work on initiatives that will integrate SoftBank's investment expertise and its own manufacturing and technology services.
SoftBank and Foxconn, formally known as Hon Hai Precision Industry Co, have also worked together in India. In 2015, SoftBank and Foxconn joined hands with India’s Bharti Enterprises Ltd to set up a renewable energy joint venture in the country. The joint venture envisaged an investment of around $20 billion over a period of time.
SoftBank and Foxconn are also co-investors in e-commerce firm Snapdeal and messaging app Hike. The two companies took part in a $500 million funding round for Snapdeal in 2015 and a $175 million investment round for Hike last year.
Overall, SoftBank has invested nearly $2.8 billion in India so far, according to VCCEdge, the data research arm of News Corp VCCircle.
SoftBank chairman and managing director Masayoshi Son has said the company planned to invest $10 billion in India in 10 years.
Besides Hike and Snapdeal, it has invested in cab aggregator Ola and mobile advertising technology firm InMobi. SoftBank had also put money in real estate portal Housing.com, which agreed to merge with rival PropTiger earlier this year. News Corp, the largest investor in PropTiger, owns the parent of this website.
Apart from Hike and Snapdeal, Foxconn has invested in MoMagic Technologies through unit FIH Mobile Ltd.
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