Foxconn Rumoured to Take Over Pegatron, Quit Channel Business
Foxconn Electronics, a leading contract maker of various electronics components, may acquire Pegatron Technologies, a spin-off from Asustek Computer that also makes various hardware on contract basis. In exchange, Foxconn will reportedly have to quit retail and channel business.
According to unofficial information reported by The Inquirer web-site, there are ongoing negotiations between Asustek, which still owns Pegatron, and Foxconn over the potential deal under which the latter would acquire Pegatron.
If the companies reach the agreement, Foxconn Electronics (Hon Hai Precision Industry) will get additional manufacturing capacities along with contracts and clients base. The company has to expand its presence on the market of contract electronics manufacturing after arch-rival Flextronics acquired Solectron last year. On the other hand, many sources from Foxconn have noticed that channel and retail markets were natural directions for the firm to grow further.
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