Foxconn and Sharp approve $3.5 billion takeover

Foxconn and Sharp approve $3.5 billion takeover


WEDNESDAY: As per official press releases, finally the ongoing negotiation has come to a conclusion where both Sharp Corp. and Foxconn Technology Group have given consent over a deal worth 389 billion Yen (US$ 3.5 billion).

The deal particularly uplifts joy for Foxconn as it has been into constant trail to expand its market – giving its position a bright future; and that too it sees by collaborating with Sharp (the current supplier of smartphone screens to Apple Inc.). The deal would let Foxconn to move up the technology value chain by manufacturing smartphone screens – the key component in a mobile device.

“Sharp owns several key display-related patents that should benefit Foxconn when expanding its own panel-making business.” – IHS Technology’s senior director, Yoshio Tamura

INSIGHT: Sharp offers variety of products to its Japanese consumers, i.e. from desktop calculators to flat-screen TVs and refrigerators. Not to mention, It invented many of the world’s first tech products during its 103-year history but fell into deep financial trouble beginning in 2012 due to big investments in display screens and solar panels. Sharp products are of high demand in Japan but unfortunately due to lack of resources it could not establish itself on international platform.

“We have much that we want to achieve and I am confident that we will unlock Sharp’s true potential and together reach great heights,” Foxconn Chairman, Terry Gou

As per terms set, Sharp would give its new shares to Foxconn in exchange for an infusion of Yen389 billion – BEARISH than the previous offer worth Yen489 billion. Collectively the price comprises the purchase of both common shares worth Yen289 billion and preferred shares worth Yen100 billion.

As per Sharp, a definitive agreement for the deal is set to be signed on Saturday, followed by a news conference with its Chief Executive Kozo Takahashi and Mr. Gou in Osaka.

Sharp looks onto an operating loss of Yen170 billion on revenue of Yen2.45 trillion for the fiscal year ending this month, due to weaker smartphone panel sales in China and some extraordinary charges related to restructuring.