Google has agreed to acquire a stake in Ennoconn Corp (樺漢科技), an industrial computer subsidiary of Hon Hai Precision Industry Co (鴻海精密), at a time when the global tech sector has set its sights on opportunities resulting from the metaverse concept.
Ennoconn said in a statement on Tuesday that a board meeting decided to offer Google a 4.6 percent stake — the third-largest of an institutional investor — via private placement.
Analysts have said that Ennoconn’s product line of servers and gadgets used for 5G applications, data centers and the Internet of Things leaves it well positioned to profit from the so-called “metaverse” concept, which has been talked up by Meta Platforms Inc CEO Mark Zuckerberg since July last year.
Photo: Reuters
Hon Hai, also known as Foxconn Technology Group (富士康科技集團) internationally, is Ennoconn’s largest institutional shareholder, with a 32.98 percent stake through Bao Shin International Investment Co (寶鑫國際投資), ahead of Fubon Life Insurance Co (富邦人壽), which holds a 6.67 percent stake, Ennoconn’s annual report showed.
Ennoconn said that it would sell 4.88 million shares to Google via private placement at NT$226.92 per share, which represents a 9.59 percent discount from Ennoconn’s closing price on Tuesday.
That would translate into a NT$1.11 billion (US$40.19 million) investment by Google. The acquisition would be Google’s first stake in a company publicly listed in Taiwan.
Stakes acquired through a private placement cannot be disposed of for three years, Ennoconn said, adding that it hopes to maintain long-term ties with Google.
Ennoconn previously launched a private placement in August last year to bring smartphone chip designer MediaTek Inc (聯發科) and artificial intelligence solution provider VIA Technologies Inc (威盛電子) on board to help it extend into the market for cloud technology-based applications.
Prior to the private placement deal with Google, Ennoconn worked with Google Cloud, Google’s cloud computing services unit, to provide high-performance computing and digital services.
Benefiting from solid global demand for 5G, smart Internet of Things and cloud technology applications, Ennoconn had consolidated sales of NT$84.49 billion in the first 11 months of last year, up 14.4 percent from a year earlier.
Other Hon Hai subsidiaries have also been investing in the metaverse concept.
For example, Foxconn Industrial Internet Co (富士康工業互聯網), Hon Hai’s Shanghai-listed subsidiary that specializes in industrial Internet of Things solutions, ships graphics processors around the world.
Hon Hai shares yesterday increased 5.31 percent to close at NT$109 in Taipei trading, while Ennoconn shares rose 10 percent to close at NT$276.
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