Hon Hai subsidiary to acquire stake in Austrian IT group

Ennoconn Corp. (??), an industrial PC subsidiary of Taiwan-based Hon Hai Precision Industry Co., has agreed to acquire a stake in an Austrian information system integration solutions provider.

In the acquisition, Ennoconn will spend about 153 million euros or NT$5.35 billion (US$168 million) to take a 29.4 percent stake in S&T AG, which is currently listed on the Prime Standard segment of the Frankfurt Stock Exchange.

After the deal is completed, Ennoconn is expected to become S&T's largest shareholder.

As S&T plans to use the proceeds from the deal with Ennoconn to acquire a 29 percent stake in German-based embedded computing brand Kontron AG, the Taiwanese suitor has said it will be investing in the German firm indirectly.

According to Ennoconn, S&T's applications can be seen in a wide range of industries, including medical services, telecommunications, big data, production automation, smart electricity grids and energy development. Last year, S&T posted 470 million euros in sales, Ennoconn said.

On its official website, S&T says it employs a workforce of about 2,400 and has operations in 20 countries, while its extensive portfolio of IT services and solutions has transformed the company into one of the major suppliers in Central and Eastern Europe.

Ennoconn said that Kontron posted almost 470 million euros in sales in 2015. The Taiwanese investor plans to take advantage of Kontron's embedded computer technology to strengthen its industrial PC capability.

In the future, Ennoconn said it would work with the two European strategic partners to channel resources from parent company Hon Hai into the development of industrial automation, Internet security, cloud communications, big data and handheld devices.

A foreign brokerage said that the acquisition price was fair, adding that Ennoconn is now expected to enter the fields of medical services and energy development as a result of the deal. In addition, S&T's sales networks, will provide Ennoconn with greater access to the East European market.

The brokerage maintained a "buy" recommendation on Ennoconn shares.

Despite the acquisition, Ennoconn shares closed down 0.19 percent at NT$525.00 on the Taiwan Stock Exchange on Thursday after hitting a high of NT$542 as investors locked in earlier gains amid concerns over volatility in the global market.

Source: Focus Taiwan News Channel