Taiwanese tech giant Foxconn is acquiring American electronics manufacturer Belkin in a deal worth $866 million in cash, the two companies announced Monday. The duo described the move as a strategic attempt to create a new leading company in the home automation and router segment, having revealed the details of the tie-up have been finalized as part of a definitive agreement that's understood to be subject to regulatory approvals. Belkin's research and development efforts spanning a wide variety of sectors should also be bolstered as a result of the purchase, allowing the Los Angeles, California-based company to tap into Foxconn's vast resources and distribution channels that could allow it to expand its global footprint.
Neither Foxconn nor Belkin referenced any regulatory reviews meant to be conducted before the consolidation can be concluded and it's presently unclear whether the two firms can expect any issues on that front. While officially a Taiwanese firm, Foxconn has many ties to China where the majority of its manufacturing operations are located, whereas Washington is presently wary of approving any deals that could benefit the Far Eastern country given the current volume of trade-related tensions between the two. President Trump blocked the acquisition of Oregon-based chipmaker Lattice Semiconductor Corporation last September, having prevented Chinese Canyon Bridge Fund fund from taking over the publicly traded company over national security concerns. More recently, the President opted for a similar move to prevent Broadcom from completing its hostile merger with Qualcomm after a Treasury Department security panel advised him to do so, having claimed the move could indirectly benefit China's largest technology company Huawei even though Broadcom is incorporated in Singapore and was soon set to return its headquarters to the U.S., a plan that it still intends to see through next month.
The possibility of the Foxconn-Belkin consolidation meeting a similar end likely depends on the number of federal contracts the American company presently has or doesn't have, as well as Washington's assessment of Foxconn's ties to China. Belkin's brands such as Linksys and Wemo will continue to operate as Foxconn subsidiaries and won't be fully absorbed by the Taiwanese manufacturer going forward, the duo confirmed.