Sharp To Accept Foxconn Takeover Offer: NHK

Foxconn-formally known as Hon Hai Precision Industry Co.-and Innovation Network Corp. of Japan, a government-backed fund, have been competing for control of Sharp since past year.

We heard rumbles about such plans in late January, and now sources have surfaced claiming Sharp Corporation has selected Foxconn of Taiwan as the preferred bidder.

Sharp has opted to give Foxconn preferred negotiating rights after the Taiwanese company increased the value of its offer, they said.

Some government officials have voiced concern that Sharp’s human resources and technologies may flow out of the country if the company comes under Hon Hai’s umbrella.

Takahashi said that the offer amount was not the only consideration and that losing propriety technology to a foreign company was not a factor in weighing the Foxconn deal. Loss per share was 66.24 yen, compared to loss of 4.23 yen in the prior year.

Struggling to keep its liquid crystal display business competitive with Asian rivals, Sharp is expecting to conclude a deal within around a month, Takahashi said.

Sources close to the matter have said, however, that Hon Hai’s deep-pockets will likely see the buyout go to the Taiwanese company, which has purportedly said it will keep the current Japanese executives in their positions.

For the nine months to December, it posted a loss of 108.33 billion yen ($918 million), worse than last year’s loss of 7.16 billion yen for the same period.

The INCJ plans to turn Sharp into its subsidiary and then spin off Sharp’s LCD unit to integrate it with major LCD maker Japan Display Inc. INCJ said it would continue talks with Sharp.

Foxconn could also start selling products under its own name once the deal is completed.

Reports have also circulated that Sharp’s solar business could be merged with Solar Frontier under a separate restructuring, though technological synergies between the two do not exist and cost savings questionable.

The century-old Osaka-based electronics maker has suffered deep losses after its consumer-electronics business declined and it faced tougher competition in the display panels it sells to smartphone makers.

Atsuko Fukase, Megumi Fujikawa and Kosaku Narioka contributed to this article.