Foxconn Industrial Internet Co (FII, 富士康互聯網), the China-based Internet-focused subsidiary of Taiwan-based manufacturing giant Hon Hai Precision Industry Co (鴻海), has formed a strategic partnership with three Chinese Internet giants.
FII, which is set to be listed on the Shanghai Stock Exchange soon, has completed placing part of its shares with several Chinese strategic partners, it said.
Among the partners are e-commerce company Alibaba Group Holding Ltd (阿里巴巴), search engine Baidu Inc (百度) and online service provider Tencent Holdings Ltd (騰訊).
Each of the three companies has pledged to buy about 21.79 million FII shares with a lock-up period of three years, FII said.
The firm has set its initial listing price at 13.77 yuan, which means that the three companies are to each spend about 300 million yuan (US$46.89 million) to become shareholders in the Hon Hai subsidiary.
FII said that a total of 20 prominent Chinese enterprises secured shares through a placement with a private equity fund owned by Chinese state-run State Development and Investment Corp, which is to secure 72.55 million shares to become the largest strategic partner by investing almost 1 billion yuan in the company.
The Chinese enterprises are expected to buy an aggregate of 59.08 million FII shares through investments with different lock-up periods, FII said.
The quick review of FII’s initial public offering (IPO) application is believed to show that China plans to lure high-tech firms as it prepares to develop its technology and innovation sector, dealers said.
FII is expected to raise about 27.11 billion yuan from the IPO by selling 1.969 billion shares, which would make it the largest listing in China in almost three years.
After the IPO, Hon Hai, also known as Foxconn Technology Group (富士康) internationally, is to retain about a stake of about 85 percent in FII.
FII’s investment in China is to focus on a wide range of new technologies, such as cloud-based computing, high-performance computing, fifth-generation Internet communication solutions for industry, data centers and smartphone-related applications, Hon Hai said.
Hon Hai added that the listing in Shanghai would allow FII to tap the rapid growth in the Internet communications and cloud computing businesses in China, and that proceeds from the IPO would be invested to expand its Internet business there.
Hon Hai’s major customers include Amazon.com Inc, Apple Inc, Dell Inc, UK-based telecom equipment maker Arris International PLC, Chinese communications technology firm Huawei Technologies Co (華為) and Chinese PC vendor Lenovo Group Ltd (聯想), its prospectus showed.
The top five customers account for more than 70 percent of FII’s revenue, the prospectus said.
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