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Electronics Production | June 07, 2007

Foxconn target Celestica<br>analysts predict

Canada based EMS provider Celestica Inc. may be an acquisition target after the Flextronics - Solectron deal. The worlds' biggest EMS provider, Taiwan based Foxconn International is the most likely buyer of Celestica, analysts predicts.

“Celestica has the highest potential of being taken out in the near term", Scotia Capital analyst Gus Papageorgiou at Scotia Capital said. He noted that a purchase may help Celestica return to profitability after reporting 15 losses in the past 16 quarters. Celestica has cut more than 28,000 jobs since 2000. UBS AG analyst Long Jiang said that Consolidation in this industry is long overdue. He estimates that as much as 40 percent of the industry's manufacturing capacity is idle and that consolidation would put assets into better hands. According to Long Jiang, Hon Hai Precision Industry Co., which trades under the name Foxconn, would be the most likely Celestica buyer, that company has preferred to grow organically. Other potential targets include Elcoteq and Sanmina-SCI. However Jabil Circuit has not historically been an acquisitive company, another analyst said.
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