Last updated on July 2nd, 2019 at 09:12 pm
Foxconn Interconnect Technology Ltd. has agreed to buy Los Angeles-based Belkin International for $866 million in cash, the companies announced Thursday.
FIT is a subsidiary of Hon Hai Precision Industry Co., the parent company behind the Foxconn brand. Belkin is known for having a broad range of device connectivity and power products under the Belkin, Linksys, Wemo and Phyn brands.
The deal is also a continuation of Foxconn’s movement away from being primarily a contract manufacturer for companies like Apple and towards one that has brands of its own.
Foxconn acquired Japanese electronics maker Sharp Corp. in 2016 and last year announced it would build a $10 billion LCD panel manufacturing campus in Wisconsin to sell televisions and displays in the U.S. market. The company has emphasized the potential of 8K resolution displays and 5G data connections to combine to produce new solutions in a variety of industries beyond consumer electronics.
“FIT is excited to acquire Belkin and its capabilities in the premium consumer products space,” said Sidney Lu, FIT chief executive officer. “Integrating Belkin’s best-in-class capabilities and solutions into FIT, we expect to enrich our portfolio of premium consumer products and accelerate our penetration into the smart home.”
In securities filings, FIT noted Belkin’s strong sales channels presence, world-recognized brand and growth potential as reasons for the acquisition. FIT also said it would leverage Belkin’s research and development capabilities and consumer insights operations.
“The company expects synergies to be achieved from the merger through mutual leverage of customer channels and sales networks as well as technological and production capabilities,” the filing says. “The product offering manufacturing cost may be cut down through the company’s manufacturing expertse and the sales channels of the group may be further expanded.”
It plans to establish a new “smart home” business by combining the existing Linksys and Wemo businesses with some of its own assets.
Belkin CEO and founder Chet Pipkin will stay on as CEO of a new FIT subsidiary.
“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,” Pipkin said. “The transaction also grants us access to more resources to invest in our people and to aggressively pursue opportunities in the marketplace.”