Foxconn Interconnect Technology (FIT) announced today to be acquiring German automotive component supplier Prettl SWH for EU€186 million (approx. NT$6.1 billion) that will further expand the former’s capability in key EV components. This transaction is expected to complete in the second quarter this year, and would contribute about EU€350-400 million of annual revenue to FIT for the short term afterwards, as well as increase the overall gross margin of FIT in the future through creating better product mixes.
Prettl SWH has more than a decade of experience in automobile, and assists clients in developing and manufacturing high-end automotive sensor harnesses, connectors, and power solutions. The group’s clients comprise of traditional automotive manufacturers and startups, and cultivates among major global tier 1 and 2 suppliers for a long time.
FIT commented that Pan International’s harness products are focused on general vehicles, while Prettl SWH focuses on more niche wiring harnesses, which is why a company like FIT, seeing how the latter’s priority on the niche market coincides with its strategy that targets on high-precision manufacturing that yields high gross margin in the communication market in the past, as well as Prettl SWH’s stable and long-term orders from automotive clients, has decided to acquire the group.
In addition, Prettyl SWH’s three major divisions, Sense, Electrify, and Connect, also replenish with FIT’s existing EV products by respectively corresponding with the latter’s current orientations in EV development that are Power Connection, Data Connection, and Human to Machine. The three major divisions will introduce even more comprehensive solutions for clients, and evenly expand FIT’s deployment in global production, sales, and technology of key EV components.
FIT pointed out that the merger of the two companies would uniformly expand FIT’s deployment in global production, sales, and technology of key EV components, while the latter can now obtain an additional segment of operational territory in Europe on niche automotive products.
Furthermore, FIT has been dedicated in improving its product mixes over recent years in order to increase in gross margin, and proposed the “3+3” strategy for development in fields of EV, acoustics, and 5GAIoT. The company also promised to surpass 30% in new 3+3 product mixes during 2023, and this particular transaction serves as one of the key deployments for the company in EV, acoustics, and 5GAIot fields.
(Cover photo source: Foxconn)