Foxconn, the company best known for manufacturing iPhone components, has agreed a $390m deal to buy a stake in Taiwanese 4G mobile operator Asia Pacific Telecom as it looks to branch out into new areas.
Under the deal, Foxconn, which is based in Taipei, will pay T$20 (39p) per share for 582.9 million shares in Asia Pacific via a private placement, both companies said in stock exchange filings on Tuesday, giving it an approximate 15% stake in the operator.
The deal will be carried out by Foxconn’s subsidiary company Ambit Microsystems, the unit responsible for its future 4G deployment.
Pending agreement on the deal, Ambit and Asia Pacific will merge into a single entity operating as Asia Pacific Telecom by June 20.
Following the news, shares in Asia Pacific Telecom rose as much as 6.7% before closing 1.1% higher at NT$18.05 (36p), Bloomberg reported, valuing the company at around NT$60bn (£1.18bn). Shares in Foxconn, listed on the Taiwanese stock exchange as Hon Hai Precision Industry Co Ltd, climbed 0.3% with the benchmark Taiex (TWSE) index closing 0.2% up.
Foxconn paid NT$9.18bn ($180.6m) for one of the licenses to operate part of Taiwan’s 4G spectrum in a public auction last October, with service expected to begin later this year.
"Getting a 4G license is part of Foxconn’s long-term plan to go beyond manufacturing to offer a full range of services," company spokesman Simon Hsing said at the time. "Taiwan will be a showcase for us to prove that we can offer integrated hardware, software, content and services."
The news is the latest in a series of moves by Foxconn as it looks to expand its focus into new areas and begin working with a wide range of partners. Earlier this year, it was reported that the company was looking to expand its manufacturing into both the US and Indonesia, with Foxconn Technology Group chairman Terry Gou quoted as saying "The U.S. is a must-go market."
Alongside its existing deals with Apple and Mozilla, Foxconn is also reportedly planning to sign a deal with BlackBerry to design and market its phones in China as the company struggles to reinvigorate its smartphone business.
