Foxconn Said to Have Approached Nissan to Take Controlling Stake

Hon Hai Precision Industry, the Taiwan-based manufacturer of iPhones and other electric products known as Foxconn, has approached Nissan Motor to take a controlling stake, a person with knowledge of the matter said. 

Foxconn, which has been investing heavily in factories to build electric vehicles, would be interested in the entirety of the maker of Pathfinders, Sentra sedans and GTR supercars — not just the Japanese firm’s plants and equipment, the person said, asking not to be identified because the proposal isn’t public.

It’s not clear whether Nissan has engaged in substantial discussions with Foxconn, or already rebuffed the Taiwanese company’s approach. A spokesperson for Nissan declined to comment. A representative for Foxconn wasn’t immediately available for comment.

News of Foxconn’s interest emerged as Honda Motor Co. and Nissan announced they have entered potential merger talks, which would better position the combined company to face competitive challenges around the world, including in China, where both automakers are suffering. The Nikkei reported that Foxconn’s interest in Nissan accelerated the two Japanese companies’ efforts out of fears that Nissan may be vulnerable to a takeover by the Taiwanese firm.

Honda is considering several options that may also involve a capital tie-up or the establishment of a holding company, Executive Vice President Shinji Aoyama said on Wednesday. 

Reports of the potential deals cap a tumultuous month for Nissan, which has seen a steep drop in profitability, a falling share price, management overhaul and a new restructuring plan. Nissan stock jumped as much as 24 percent, the most on record, on the back of the possible Honda merger news.

For Foxconn, taking a controlling stake in a Japanese firm wouldn’t be unprecedented. In 2016, it took a two-thirds stake in electronics maker Sharp Corp., handing it a number of benefits including a well-known consumer electronics brand, LCD display production capacities and intellectual property. It has been reducing that interest slowly over time but is still the top shareholder.

Japanese business publication Diamond Online reported Foxconn’s proposal earlier Wednesday.

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