10China’s internet leaders, Alibaba, Baidu, and Tencent have decided to purchase shares in Foxconn Industrial Internet (FII), a major manufacturing partner of Apple’s iPhone. The move has puzzled the industry since the three are rivals in e-commerce, search, and social media.
According to the filing submitted to Shanghai Stock Exchange, the three companies that are collectively known as BAT will each get 21.79 million shares, which equals to 3.86% in total.
FII could be an essential partner for the three companies as they endeavor to dive into cloud computing, data centers and automotive tech. The company serves several tech firms including Dell, Amazon, Cisco in addition to Apple that is its major customer.
Foxconn, through its subsidiary FII recently announced its plans to raise $4.26 billion in the China’s market in what is going to be the China’s biggest IPO since 2015. FII unit specializes in manufacturing of electronic devices, cloud service equipment, industrial robots and much more. The company is determined to offer about 1.97 billion shares to be purchased at 13.77 yuan per share in the domestic market.
According to the latest news, Foxconn is in the process of moving to other areas that will reduce its reliance on manufacturing Apple’s smartphones. The company intends to expand its products to include the cloud computing, fifth-generation wireless technologies, smart manufacturing, industrial internet and much more. China is one of the lucrative markets that FII is currently focusing on.
Could It Be Politics?
Though the investment amount is small, it’s strange BAT companies that compete in the same market to invest in one firm cooperatively. For instance, Google, Apple, and Facebook all based in the US occasionally fight in their respective fields such as e-commerce, search, social media, and mobile payments. They can’t agree to invest in one company at all.
The BAT firms are usually fierce and territorial rivals that compete for the same customer and business opportunities to venture into but in this case, they are putting all that aside to invest in one giant IPO.
In the recent past, Chinese government has been pushing more companies across the globe to list in its economy and has provided a favorable business environment for foreign investors to venture their entities in the region. It’s also estimated that in China, politics play a major role in how companies operate their businesses. That is why it’s possible for the BAT rivals to venture collectively in the upcoming FII IPO.