Goertek Inc, an Apple supplier, has announced plans to acquire two subsidiaries of Hong Kong’s Luen Fung Commercial Holdings for HK$10.4 billion (US$1.3 billion).

The subsidiaries, Mega Precision Technology and Channel Well Industrial, specialize in precision structural components.

In a filing with the Shenzhen stock exchange, Goertek said that the acquisition aims to enhance its competitive position in the industry.