Sat, Jan 01, 2005 - Page 11 News List

Hon Hai greatly expanding acquisitions

STAFF WRITER, WITH BLOOMBERG

Hon Hai Precision Industry Co (鴻海精密) will accelerate moves on mergers and acquisition to seek integration of technology and access to new markets, a Chinese language newspaper reported, citing chairman Terry Gou (郭台銘).

Gou, 53, built his fortune after starting the company in 1974 with an investment of NT$300,000 to make plastic knobs for television sets. The founder of Hon Hai reiterated his plans to retire in about four years, the paper said.

Gou, one of Taiwan's richest men, has assets of US$2.8 billion, according to Forbes magazine. He said the odds of him retiring in 2008 is "99.99 percent."

In a cable television interview on Dec. 30, Guo said the company had bought three companies since 2003.

To tap into the mobile phone market, Hon Hai in May 2003 acquired Finland's mobile phone casing maker Eimo Oyj. In October the company paid US$18 million to buy a Motorola cellphone manufacturing plant in Mexico.

Then in November 2003, Hon Hai agreed to buy Ambit Microsystems Corp (國電) for NT$36.7 billion (US$1.1 billion) in stock to expand in the telecom business.

Guo said the purpose of these deals was to seek technological incorporation as the company wanted to upgrade its manufacturing capabilities. Besides, the acquisitions would help the company tap into new markets and map out strategies for globalization, he said.

"We just started acquisition deals now and are looking to accelerate that pace in the future," Guo said.

Hon Hai mainly produces electrical connectors and assembles personal computers for Dell and Hewlett-Packard, but is tapping into mobile phone and flat-screen liquid-crystal-display manufacturing. The local company also produces Sony PlayStation 2 game consoles.

Earlier this week, the company was given approval to invest US$68 million in a unit in Yantai in the eastern Chinese province of Shandong. The company's November sales rose 23 percent to NT$43.7 billion (US$1.3 billion), from NT$35.4 billion a year earlier.

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