TECO Electric & Machinery Co Ltd ("TECO") and Hon Hai Technology Group ("Foxconn") held a major press conference today (30th) at the Taiwan Stock Exchange to announce a strategic alliance through a board-approved share exchange. This partnership combines TECO's strengths in electromechanical systems with Foxconn's expertise in ICT to seize the global trend of AI data center development toward standardization and modularization, jointly tapping into vast AI data center (AIDC) business opportunities worldwide. Going forward, the strategic alliance will explore the possibility of expanding cooperation in Foxconn's "3+3+3" areas.

According to terms approved by both boards, respectively, TECO will take a 0.519% stake in Foxconn. In turn, Foxconn will own 10% in TECO. The latter will issue 237,644,068 new shares to Foxconn, and Foxconn will issue 72,481,441 new shares to TECO, implying a share exchange ratio of approx. 1 to 0.305. The no-cash transaction is targeted to complete in the fourth quarter of this year, conditional on regulatory approvals.