Taiwan’s Foxconn to buy stake in SoftBank investment unit

The transaction, which takes effect on March 1, involves Foxconn acquiring 96,268 new shares in SoftBank Group Capital APAC, turning what is currently a wholly-owned unit into a joint venture. SoftBank will have a 45.5% interest in SoftBank Group Capital APAC but the unit will no longer be considered a subsidiary.  

“Integrating SBG’s [SoftBank Group’s] investment expertise into Foxconn’s global presence and network is expected to convey new insights” into future investment under the leadership of Foxconn, SoftBank said in a statement.

SoftBank Group Capital APAC, previously known as SB China Holdings, was set up in 2000 in Singapore. It made its initial investment in China's Alibaba Group the same year. It is led by Alok Sama, president and CFO at SoftBank Group Capital, and Jonathan Bullock, a director of SoftBank Group US. For the year ended March 2016, SoftBank Group Capital APAC had net assets of $25 billion, compared to $26.34 billion in 2015 and $1.58 billion in 2014.

A large portion of these assets have been transferred to SoftBank Group since April of last year, reducing the market value of SoftBank Group Capital APAC's holdings to approximately $500 million. 

Separately, SoftBank Group generated proceeds of $8.9 billion last year by reducing its Alibaba stake from 32% to about 28%. Shares were sold to Alibaba itself, to the company's management and founders, and to GIC Private and Temasek Holdings. SoftBank also offered $5.5 billion in mandatory exchangeable trust securities, which can be exchanged for Alibaba shares in three years.

Foxconn, formally known as Hon Hai Precision Industry, and SoftBank are long term business partners. In 2015, Foxconn and Alibaba contributed JPY29 billion ($236 million) to SoftBank’s robotics division – SoftBank Robotics Holding Corp. Foxconn is also reportedly planning to invest in SoftBank’s Vision Fund, which is targeting $100 billion to invest in global technology.

SoftBank Group’s core companies are SoftBank Corp, which has a range of internet, telecom and payment-related assets, SoftBank Commerce & Service Corp, which distributes IT-related products and services, US mobile operator Sprint, Yahoo Japan, and microprocessor designer ARM Holdings. Last week, it said it will acquire US-listed Fortress Investment Group – which manages $36.7 billion in alternatives – for approximately $3.3 billion in cash.

Foxconn - best known as a key supplier to Apple and other consumer electronics brands – has previously made a number of high-profile tech investments in Asia, including China ride-hailing platform Didi Chuxing and bike-sharing start-up Mobike. It has also partnered with SoftBank in some venture investments in India, such as online marketplace Snapdeal and mobile messaging app Hike.

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• Topics
• North Asia
• Greater China
• Financials
• Taiwan (China)
• Foxconn Technology Group
• Softbank
• Joint Venture
• Venture
• TMT
• Alibaba Group