Most people would know Foxconn – the massive manufacturing company best known for putting together the gadgets designed by other companies. It’s just been announced that it is making a move from the background. Foxconn has signed “a definitive agreement” to purchase accessories company Belkin for US$866M is cold, hard cash. This will given them a foothold in many markets as Belkin has a wide range of products including Linksys networking gear and WeMo home automation kit.
Foxconn Interconnect Technology Limited will be able to leverage their manufacturing power with Belkin’s extensive reach in retail markets.
The deal is not complete yet as it’s subject to regulatory approval. And with the deal including a bunch of networking gear, there’s no guarantee it will go though given US paranoia around the potential influence of foreign companies on network security. However, Foxconn did recently pledge US$10B over three years to build a massive LCD panel factory in Wisconsin that will employ 3000 people.
So, perhaps that will help grease the wheels for this deal. It’s doubtful the US government will want to alienate a company promising jobs and lots of money.
With Foxconn heavily reliant on Apple for a massive chunk of its business, this is a smart move as they seek to develop revenue streams that aren’t reliant on a single customer. If Apple moved their business or even reduced it significantly, it could have massive impact on the Taiwan based company.
For the rest of us, it’s unlikely this deal will have immediate consequences. But with Foxconn’s expertise in making all sorts of gadgets, we could see the Belkin, Linksys and WeMo brands broaden and include a wider range of products – assuming all the regulatory approvals go through.