Foxconn, a Taiwanese multinational contract manufacturing company has announced the purchase of Belkin, Linksys & WeMo. The company is known for manufacturing iPhones and other consumer electronics and plans to step into home automation with the acquisition.
Foxconn subsidiary, Foxconn Interconnect Technology (FIT) has announced the acquisition of Belkin and its subsidiaries Linksys and WeMo for $866 million in cash. According to Financial Times, the purchase is subject to approval from the US Committee on Foreign Investment. Implying the deal isn’t finalized until the Committee approves of it.
Foxconn has also pledged a $10 billion factory in Wisconsin last year, in hopes to secure its Belkin acquisition, by providing an Ernst & Young report stating the new plant would create 13,000 jobs. But that agreement has also drawn some flak after the Wisconsin state let the company skip the environmental impact study of the plant and additionally gave the Taiwanese MNC over $3 billion in incentives.
Belkin made $789 million in sales in the fiscal year ended Sept 2017. Belkin and its subsidiaries will operate under a subsidiary of FIT, under the leadership of Chet Pipkin, CEO, and Founder of Belkin International. He is said to join FIT’s management team.
Pipkin said in a statement on the acquisition,
“This move will accelerate our vision of delivering technology that makes the lives of people around the world better, more convenient and more fulfilling. I am thrilled to take our brand portfolio of Belkin, Linksys, Wemo, and Phyn to new heights. We see significant synergies with FIT, including leveraging its world-class manufacturing capability to enhance Belkin’s operating efficiency and competitiveness. The transaction also grants us access to more resources to invest in our people and to aggressively pursue opportunities in the marketplace.”
There’s a slight chance the Foxconn-Belkin deal may face the same fate as the Broadcom-Qualcomm acquisition that took place earlier this month, after President Trump blocked it based on the Committee’s advice, terming it a national security problem. Foxconn is planning to branch out its business to reach out the consumers directly, by doing it the Apple-way. Foxconn plans to play it safe by entering the consumer electronics business to save it from going in losses if ever Apple plans to change its manufacturer or if the iPhones were to lose their charm, in future.