Austrian IT group S&T AG (SANT1.DE) said Taiwan's Ennoconn (6414.TW), an arm of the world's largest contract electronics manufacturer Foxconn, is in advanced talks to take a near 30 percent stake.
S&T said in a statement on Wednesday that it will issue new shares that will be bought by Ennoconn, amounting to a 10 percent stake and Ennoconn will buy more shares from S&T's major shareholders to raise its stake to nearly 30 percent.
S&T said it plans to use the capital from the Ennoconn deal to buy a 29.9 percent stake in German embedded computer technology provider Kontron (KBCG.DE).
Kontron shares jumped 9 percent, while S&T shares fell sharply in heavy afternoon trade.
(Reporting by Sylwia Lasek in Gdynia; Editing by Susan Fenton)