Sat, Jul 09, 2016 - Page 12 News List

Hon Hai subsidiary to buy Microsoft handset factory

By Lauly Li  /  Staff reporter

Hon Hai Precision Industry Co’s (鴻海精密) subsidiary Chief Expertise Ltd is to purchase Microsoft Corp’s handset manufacturing facility in Vietnam for US$22 million, Hon Hai said on Thursday in a filing with the Taiwan Stock Exchange.

“The investment is to acquire 100 percent stake of the feature phones and smartphone manufacturing plant in Bac Ninh Province in northern Vietnam from Microsoft Mobile Vietnam Limited Liability,” Hon Hai said in the filing, without elaborating.

Microsoft Mobile Vietnam, rebranded from Nokia Vietnam Ltd, is the US company’s subsidiary in the Southeast Asian nation that previously manufactured feature phones under the Nokia brand.

Hon Hai said the US$22 million will be payable within seven business days of the transaction’s closing date.

Hon Hai’s filing came two months after its subsidiary FIH Mobile Ltd (富智康) announced that it will partner with Finnish HMD Global Oy to buy Microsoft’s smartphone assets under the Nokia brand for US$350 million.

Under the agreement with Microsoft, HMD Global is to be in charge of selling feature phones and FIH Mobile is to make the products and expand the business to emerging markets through its logistics and distribution networks.

The purchase of the manufacturing plant in Vietnam is part of the agreement between FIH Mobile, HMD Global and Microsoft in which the US company is also to sell its manufacturing facility in Vietnam to FIH Mobile and transfer about 4,500 employees to FIH Mobile or HMD Global, Microsoft said in May.

FIH Mobile chairman Vicent Tong (童文欣) in May told reporters that owning the Vietnam plant could help the company reallocate the resources for mobile phones under the Nokia brand.

Separately, Microsoft on Thursday announced a shake-up in its top management, including the departure of longtime chief operating officer Kevin Turner.

Microsoft chief executive Satya Nadella said that five executives will divide the duties held by Turner, who played a pivotal role over the past decade as Microsoft shifted from packaged software to programs offered as services in the cloud.

Turner will remain at Microsoft to aid with the transition through this month, before he leaves to become chief executive officer at global financial firm Citadel Securities, Nadella said.

The changes come as Microsoft prepares to mark the first anniversary of Windows 10 with a major update to the operating system powering more than 350 million PCs.

The Windows 10 update is to be released on Aug. 2.

Additional reporting by AFP

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