Hon Hai Precision Industry Co Ltd (鴻海精密) yesterday said it plans to wholly acquire US-based Belkin International Inc in its latest move to broaden the company’s portfolio of consumer brands.
The world’s biggest contract electronics maker said that FIT Hon Teng Ltd (鴻騰六零八八), its Hong Kong-listed subsidiary, would acquire the California-based maker of mobile devices, accessories and peripherals for US$866 million.
Founded in 1983, Belkin owns Lynksys, a brand known for its Wi-Fi routers, and markets home automation products under the Wemo brand.
PATENTS
The acquisition would bring access to Belkin’s 700 technology patents, talent and market share, Hon Hai said in a filing with the Taiwan Stock Exchange.
The acquisition is part of plans to diversify into segments beyond contract manufacturing and is expected to bring long-term benefits and synergistic gains for its earnings and net value per share, Hon Hai said.
FIT Hon Teng manufactures and distributes electrical components, including backplane connectors, memory cards, sockets and terminal blocks.
BRANDING
In its filing to the Hong Kong Stock Exchange, FIT Hong Teng said that Belkin has established a world-recognized brand in its wide range of consumer offerings, as well as a strong distribution network throughout the US, Canada, South America, the Asia-Pacific region and Europe.
FIT Hong Teng expects to establish a new “smart” home business by combining the existing Linksys and Wemo businesses, and related assets of Belkin, as well as the US company’s research and development capabilities in “smart” management solutions for water, gas and energy.
TECHNOLOGY
The rapid rise of “smart” home products and the near-term projections for the market provide significant additional tailwinds to future growth, FIT Hong Teng said.
Coupled with the manufacturing expertise of the company and other Hon Hai affiliates, Belkin is expected to lower its production costs, FIT Hong Teng said.
Belkin recorded strong sales of about US$789.16 million for the fiscal year ending September last year, up from US$754.39 million in 2016, according to FIT Hong Teng.
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