Foxconn Is Reportedly Offering $5.3 Billion To Buy Sharp

January 21, 2016 - Written By Kishalaya Kundu

Taiwan-based Foxconn Technology Group, the world’s largest contract manufacturer of electronics, has reportedly offered as much as 625 billion Yen ($5.3 billion) to buy struggling Japanese electronics company, Sharp Corporation, according to a report published by the Wall Street Journal. The Taiwanese company has also declared that it does not plan to replace the top management at Sharp after the proposed takeover. The offer from Foxconn is said to be more than twice as much as a proposal from a Tokyo-based investment firm that is said to be backed by the Japanese federal government. The company, called the Innovation Network Corporation of Japan (INCJ), had reportedly offered about 300 billion Yen, which was the highest offer received by Sharp before Foxconn came out with its proposal.

Shareholders of the beleaguered Japanese technology company seem to be enthused by the Foxconn offer, seeing as the company’s share price rose by over two percent after the report was first made public. Overall, the stock was up six percent on Thursday’s trade, which puts the market value of Sharp at about 218 billion Yen ($1.8 billion). The company’s stock fell by as much as 53 percent last year and by 20 percent during 2014 amidst well-documented struggles relating to its display panel and other critical businesses. The company has tried to restructure its business by cutting costs and focusing on its core businesses in recent times. However, multiple rounds of job cuts and even hiving off its North American television business to Chinese electronics company, Hisense, doesn’t seem to have helped the company enough to have saved it from having to sell out.

Meanwhile, reports out of Japan seem to indicate that Government officials are eager to keep the ownership of the company Japanese, which is why the INCJ offer still remains relevant. It remains to be seen which offer will finally be accepted by the company, or if the government-backed investment firm increases its offer to sweeten the deal for Sharp. While a Foxconn spokesperson refused to speak on the matter, a spokesman for Sharp said that the company is “talking with several companies about the structural improvement of liquid-crystal-display business. We don’t comment on the details of individual talks”.