Foxconn to pay over $US6bn for a majority stake in Sharp

Foxconn will be the parent of the Japanese company after the transaction

 Foxconn to pay over $6bn for a majority stake in Sharp

Foxconn to pay over $6bn for a majority stake in Sharp

Sharp has approved an offer from Hon Hai Precision Industry and related companies to acquire over 66 per cent of the company’s voting stock, making the Taiwanese contract manufacturer the new parent of the venerable Japanese firm.

The deal, which will bring to ailing Sharp funds for investment in newer technologies like OLED, will be done through the issue of new shares to Hon Hai and partner companies for 489 billion yen (US$4.4 billion). Hon Hai will also acquire shares held by lenders to Sharp for around 200 billion yen.

A maker of Apple’s iPhone and other key consumer electronics products, Hon Hai, which goes by the trade name Foxconn, has long eyed Sharp for its display business and manufacturing know-how. The Japanese company is also a supplier to Apple.

Sharp said it had received a commitment from Foxconn and related companies that its brand would be retained as well as its existing employees.

The Japanese company, which has businesses in consumer electronics, components like camera modules, solar cells and LCDs, was earlier negotiating a deal with Innovation Network Corporation of Japan, which is backed by the Japanese government.

The deal was seen to be attractive as it would keep the company in Japanese hands, but Sharp said Thursday that the arrangement would involve the company splitting out its display business, which would be then integrated into Japan Display, which combines the small and medium display businesses of Japanese companies like Sony, Toshiba and Hitachi. INCJ would in turn invest 300 billion yen into Sharp.

Sharp said it was looking for an investor that would support the company’s investments in technologies such as robotics and the Internet of Things to address opportunities in the area of “new connections between people and house appliances.”

The company has been a household name in Japan and is still associated in the public mind with devices such as propelling pencils, which are still referred to as “Sharp pens.” One of the company’s early creations was the "Hayakawa mechanical pencil," named after the company's founder and developer of the device, Tokuji Hayakawa.

Sharp had earlier this month confirmed discussions with Foxconn and said the Taiwanese company had extended its offer to February 29.

The company also said this month that its board of directors had agreed on a capital investment to increase production capacity and focus on small- and medium-size high-value added LCD panels at its Kameyama Plant No. 2. It said it aimed to counter over-supply and falling prices in the TV and smartphone display segment by focusing its production capacity on high-value added panels for the small- and medium-size market that are high-definition, narrow-framed and offer low power consumption.

Describing the business conditions facing the company as “still harsh,” Sharp also announced this month an extension to March 2017 of salary and allowance cuts for workers and managers that were introduced in August last year. It said the reductions would reduce costs by 3.6 billion yen for the year ending March 2017.

Foxconn has previously shown interest in investing in a 10 per cent stake in Sharp.

Join the Good Gear Guide newsletter!

Error: Please check your email address.

Tags ApplefoxconnHon Hai Precision IndustrysharpsmartphonesiPhonetvlcd

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

John Ribeiro

IDG News Service
Show Comments

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?