Foxconn Interconnect Technology Ltd. (FIT) – a subsidiary of the Foxconn Technology Group, the Taiwanese company best known for manufacturing a range of electronics products for various companies around the world – announced yesterday, March 26, that it was acquiring American consumer electronics manufacturer Belkin for US$ 866 million in cash. As part of the deal, FIT will acquire the Linksys, Wemo, Belkin, and Phyn brands, marking its first foray into direct consumer brand sales after being a behind-the-scenes manufacturer for many years.
Set up in 1974 as an electrical components manufacturer under the name Hon Hai Precision Industry Co., Ltd., Foxconn has grown in scale and size over the decades to become one of the largest electronics goods manufacturers in the world. Foxconn’s portfolio of manufactured devices includes the BlackBerry, iPad, iPhone, iPod, Kindle, Nintendo 3DS, Nokia devices, PlayStation 3, PlayStation 4, Wii U, and Xbox One – a 2012 report by The New York Times estimated that at the time, Foxconn was manufacturing 40 percent of all consumer electronics sold worldwide.
In a statement after the latest deal, Sidney Lu, CEO, FIT, said, “FIT is excited to acquire Belkin and its capabilities in the premium consumer products space...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.”
Sidney’s comments are particularly important given the recent success of Wemo, Belkin’s smart home brand that has been on the market for over five years now. Originally known for creating computer and phone peripherals and accessories, 35-year-old Belkin recently expanded into the networking space with the acquisition of home router manufacturer Linksys in 2013. The company’s diverse portfolio now includes Wi-Fi networking solutions for home and business; mobile accessories for laptops, smartphones, tablets; home energy management, home automation, and intelligent water solutions; and, a broad range of connectivity and power products.
Speaking about the acquisition, Chet Pipkin, CEO and Founder, Belkin International, said, “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...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.”
Chet will continue to lead Belkin as a subsidiary of FIT in the CEO position and is also expected to join FIT’s management team.
However, Foxconn still has to get approval for the deal. As the Financial Times notes, the purchase is subject to approval from the US Committee on Foreign Investment. Given the Trump government’s recent high-profile block of Broadcom’s takeover of Qualcomm, it remains to be seen whether Foxconn will get the necessary permission to go ahead with its purchase. However, the company has promised to set up a factory project in Wisconsin worth $10 billion, which may help it stay in the good books of the American authorities.