Taiwan's Hon Hai may buy into APT

Dylan Bushell-Embling
07 May 2014

Taiwanese contract manufacturing giant Hon Hai Precision Industry is rumored to be in talks to acquire a 22% stake in mobile operator Asia Pacific Telecom, while Softbank may be interested in acquiring the operator.

Hon Hai could pay between TW$11 billion and TW$14 billion ($365 million to $464 million) for the 22% stake, Reutersreported, citing local media.

Both APT and Hon Hai – through affiliate Ambit Microsystems – won spectrum in Taiwan's recent $4 billion 4G auction. The acquisition may be aimed at allowing Ambit to more rapidly roll out a 4G network – APT has around 3,000 base stations and 2.1 million subscribers.

Hon Hai, which trades as and is known in China as Foxconn, is seeking to diversify beyond contract manufacturing amid slowing sales of high-margin smartphones such as the iPhone, which it assembles for Apple.

Separate reports indicate that executives from Japan's Softbank may return to Taiwan to discuss potential collaborative opportunities, and that Softbank is considering acquiring APT.

The company is said to be interested in gaining a foothold in Taiwan due to regulators' decision to open 2.6-GHz spectrum to foster TD-LTE development.

APT's internal shareholding structure could complicate both potential deals by making an open-market acquisition difficult to arrange. Some 46% of APT shares are held among 59,000 public investors.

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