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TAIPEI - Hon Hai (TW:2317) Precision Industry Co., Ltd., also known as Foxconn (SS:601138), announced Wednesday its board of directors has approved a share exchange agreement with TECO Electric & Machinery Co., Ltd., through which it will acquire a 10% stake in the Taiwanese electromechanical company.
Under the agreement, Hon Hai will exchange 0.305 of its common shares for each TECO common share, resulting in Hon Hai obtaining 237,644,068 TECO common shares valued at approximately NTD 11.03 billion (based on July 29, 2025 share prices).
The companies aim to leverage their respective strengths in the electromechanical and information and communications technology (ICT) sectors to capitalize on opportunities in the artificial intelligence data center (AIDC) market, according to the press release statement.
"The share exchange will allow both companies to jointly build AI data center business," the statement noted, highlighting plans to focus on standardization and modularization in AIDC construction.
The transaction is expected to be completed with a tentative record date of October 1, 2025.
TECO’s business operations include mechanical equipment, refrigeration and air-conditioning systems, power generation, transmission and distribution machinery, electrical appliances, and communication equipment.
The acquisition aligns with Hon Hai’s "3+3+3 strategy," though specific details about this strategy were not elaborated in the announcement.
Diwan & Company served as the advisor for the transaction, with CPA Lu Ruiwen overseeing the financial aspects. The board reported no objections from directors regarding the transaction.
Following the acquisition, Hon Hai’s securities investment will represent 16.77% of its total assets and 37.09% of equity attributable to owners based on its most recent financial statements.
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