Foxconn Technology, the world’s biggest contract manufacturer of electronics, has purchased a stake worth $119.9m in Didi Chuxing in a deal that values the Chinese ride-hailing company at around $34b.
Foxconn’s Hon Hai Precision acquired a stake of 0.35% in the company, with the deal part of expansion plans to develop products and services for the Internet of Things (IoT).
Didi was quoted by Bloomberg as saying: “Didi and Foxconn are focused on innovation and execution. We are exploring possibilities, but there are no concrete plans for cooperation yet.”
Didi, which currently offers ride-sharing, bus hiring, chauffeur services, auto financing and test-driving services, agreed to acquire Uber Technologies’s China unit last month. Launched in 2014, Uber China has to date failed to make profits.
The firm’s dominant position in the Chinese market was boosted by $1bn investment from iPhone-maker Apple in May. The investment was Apple’s first public investment in the transportation market.
Driven by a slowdown in the smartphone market, Foxconn and Apple have been looking to invest in the automobile industry for expansion, the publication said.
China’s ride-hailing leaders Didi and Kuaidi joined forces in 2015. The merged company Didi Chuxing is being backed by the country’s Internet companies Alibaba Group and Tencent Holdings.
In September last year, Lyft and Didi Kuaidi formed an international alliance to step up competition with their rival Uber.
The partnership was expanded with the addition of Singapore-based GrabTaxi and India's Ola.
Under the partnership, the four companies will allow international travelers access local on-demand rides by using the same application they use at home.
The companies also agreed to share each other's technology, local market knowledge and business resources, besides handling mapping, routing and payments through a secure API.