Alibaba, Tencent, Baidu to hold big stakes in Foxconn unit after US$4.3 billion IPO
Foxconn Industrial Internet to use funds from China’s biggest domestic share offering in three years to develop smart manufacturing, cloud computing and 5G technology
Alibaba, Tencent and Baidu, mainland China’s three biggest internet conglomerates, will become major shareholders in Foxconn Industrial Internet after the technology firm’s upcoming US$4.3 billion initial public offering, China’s biggest domestic listing in three years.
The three received 21.78 million shares each in the maker of cloud computing technologies and industrial robots, joining three state-owned investment firms in taking big stakes, according to a statement by FII on Sunday.
A total of 20 strategic investors were allotted a total of 590.8 million shares, about 30 per cent of the total offering size, the statement said. The allotments to Alibaba, Tencent and Baidu are worth 300 million yuan (US$47 million) each based on the IPO price of 13.77 yuan, and have a lock-in period of three years.
Beijing has been actively encouraging big companies in new economy sectors to list at home, having watched as a number of high-profile ones have chosen New York and other exchanges. FII’s IPO received regulatory approval in just one month, in stark contrast to the usual one to two year wait for most companies in the mainland market.
FII, a subsidiary of the world’s largest contract electronics manufacturer Foxconn Technology Group, aims to issue 1.97 billion A shares, or 10 per cent of its enlarged capital. It plans to use the proceeds to finance 20 investment projects in eight areas, including the industrial internet, cloud computing, data centres, 5G wireless and smart manufacturing technologies, according to its prospectus.