SoftBank (SFTBY) of Japan and Apple (APPL) supplier Foxconn (FXCNY) said Friday that the two companies have formed a joint venture that could be worth $1.2 billion as the tech group plans a series of U.S. expansions that could create tens of thousands of jobs.
SoftBank said the joint venture will be set up through its SoftBank Group Capital APAC subsidiary, but once the deal is complete on March 1, the unit will be 54.5% owned by Foxconn, which is also known as Hon Hai Precision Co. (HNHPF) , which will pay $600 million for the stake.
Statements from both companies did not indicate the aim of the venture, but each has indicated in recent weeks that they are planning significant U.S. investments.
Last month, Foxconn said it is considering a $7 billion investment that would establish a U.S.-based LCD display manufacturing hub that could create as many as 50,000 new jobs.
Speaking to reporters in Taipei on Jan. 23, Foxconn Chairman Terry Gou said the U.S. investment project, which was inadvertently revealed last month after a meeting between President Donald Trump and billionaire SoftBank CEO Masayoshi Son, would likely be based in Pennsylvania, but that final decisions would be taken after negotiations with U.S. officials at the federal and state level.
Foxconn also has manufacturing sites in Virginia and Indiana and logistics operations in California and Texas.
The U.S. ambitions follow Foxconn's $8.8 billion investment in a factory in China that will make LCD displays with Sakai Display Products Corp. after founder Gou tightened his grip on the subsidiary in a move that TheStreet reported as a signal he is moving closer to defining his U.S. expansion strategy.
Foxconn publicly committed to U.S. expansion after Softbank's Son was shown with papers bearing the Foxconn logo during a photo shoot with Trump on Dec. 6 in which the Japanese billionaire pledged to invest $50 billion and create 50,000 new jobs.
Softbank is both an 82% owner of Sprint Corp(S) - Get Report and a $1 billion investor in satellite company OneWeb. Last last year, U.S. President Donald Trump said those ties would allow the Japanese firm to bring 8,000 jobs to the United States in a statement that followed Son's vow to create 50,000 more though a tech investment fund established with a Saudi billionaire.
SoftBank shares closed at ¥8,600 each in Tokyo Friday, down 0.49% on the session and in-line with losses for the benchmark Nikkei 225 index.