Taiwan’s Foxconn Electronics and Japan’s Sharp Corporation released a joint statement this week, announcing that the two companies have finally inked the deal that gives the Taiwanese contract manufacturer a controlling stake in the Japanese tech company known best for manufacturing high-quality display panels. According to the terms of the deal, Foxconn has reportedly agreed to pay 389 Billion Yen ($3.5 Billion) to acquire a 66 percent stake in the company, having earlier offered as much as 489 Billion Yen ($4.39 Billion) for the same amount of equity. The 100 Billion Yen ($898 Million) reduction from the earlier offer is understood to be on account of some “previously undisclosed liabilities” that Foxconn only got to know about after having made the earlier offer.
Foxconn Chairman, Mr. Terry Gou, had been looking to acquire Sharp Corp. for a few years now, but the Taiwanese contract manufacturing giant wasn’t, by any means, the only company bidding for the beleaguered tech company from Japan. The original list of prospective buyers also included a Tokyo-based investment firm called the Innovation Network Corporation of Japan (INCJ). The firm was said to be backed by the Japanese federal government, which was apparently unwilling to let a foreign company buy out a prestigious entity like Sharp, which was the first-ever company to have manufactured television sets in the country. The company also has a large number patents and other assorted intellectual property assets, along with its state-of-the-art production facilities, which is what apparently convinced Foxconn to shell out the big bucks for the loss-making enterprise.
While Foxconn paid around 88 yen per share to acquire the controlling stake in Sharp, the Japanese company’s shares rose 3.9 percent in Wednesday’s trading on the Nikkei stock exchange in Tokyo, to end the day at 135 yen. Foxconn’s chairman, Mr. Gou, who pursued Sharp for four years before finally getting to acquire the company, sounded positive, saying, “I am confident that we will unlock Sharp’s true potential and together reach great heights”. Analysts also expressed satisfaction at the deal finally going through after hitting many a stumbling block over the past few weeks or so. According to Mr. Hideki Yasuda, an analyst at Ace Research Institute in Tokyo, “This is positive for Sharp, although it’s hard to imagine that Foxconn won’t have to keep providing funds”.