Foxconn Technology Offers to Buy Sharp Corporation for $5.1B


Foxconn Technology (TPE:2354) submitted a proposal to acquire Sharp Corporation (TYO:6754) (OTCMKTS:SHCAF), the struggling Japanese electronics company, for ¥600 million or $5.1 billion, according to Bloomberg based on information from a source familiar with the situation.

Sharp Corporation is expected to make a decision to accept or reject Foxconn Technology’s offer before the end of this month, according to the person, who requested anonymity because the negotiations between the companies are private.

When asked about Foxconn Technology’s bid, Yoshefumi Seki, a spokesman for the Japanese electronics company said, “We’re talking with several companies about the structural improvement of liquid-crystal-display business. We don’t comment on the details of individual talks.”

Foxconn Technology previously offered to buy around 10% stake in Sharp Corporation. The negotiations between the companies faltered due to the demand of the Japanese electronics company regarding the degree of management control.

Sharp is a leading supplier of components for Apple

Foxconn Technology Chairman Terry Guo said at the time that they are still open to make future investments in the Japanese electronics company if it will be able to develop a new business plan. Mr. Guo believed that owning a stake in Sharp Corporation would be beneficial because it is one of the leading suppliers of components for Apple Inc. (NASDAQ:AAPL).

Last year, Sharp Corporation approached Innovation Network Corporation of Japan (INCJ) for possible funding to fulfill its debt obligations. INCJ is a government-backed company.

A separate report from the Wall Street Journal indicated that Sharp Corporation is considering a $5.3 billion proposal from Foxconn Technology. It is also considering a competing offer from INCJ.

Sharp LCD panel business

Last week, the Japanese electronics company issued a statement in response to speculations regarding a potential investment from INCJ and the possible sale of its LCD panel business.

Kozo Takahashi, president and director of Sharp Corporation said the management has been “continuing negotiations with other companies regarding fundamental structural reforms of LCD panel business. However nothing is determined yet at this moment.”