Japan’s Sharp decides to accept Foxconn takeover offer

Financially troubled Sharp Corp. of Japan will remain an independent company after accepting a bailout plan from Taiwanese manufacturing giant Hon Hai Precision Industry Co. Chairman Terry Gou is seeking to broaden Foxconn’s remit, transforming it into a company that also makes key electronics components and devices.

“Apple wouldn’t like Sharp and JDI to join forces because keeping as many vendors as possible can give them greater leverage over price and other negotiable conditions”, said Mr. Osanai. It’s unclear at this point if the deal Sharp accepted from Foxconn included an investment from Apple or not.

Teruo Asamoto, professor at Kyushu Sangyo University, said Foxconn’s ample resources would also enable much-needed investment in next-generation display technology, including for organic light-emitting diode (OLED) screens which Apple is believed to be adopting in its iPhone around 2018.

For Sharp, Foxconn’s ample funds will help stabilize its finances while the Taiwanese company’s global sales channels could help improve sales.

Should the deal be approved by the Japanese government, Foxconn will become one largest suppliers of smartphone and tablet LCD screens. But some Japanese officials remain cautious about allowing what they see as the country’s crown jewels go to countries that they see as lagging in technology. It initially offered about $5.3bn to take over Sharp before raising its offer to $5.9bn. Sharp and Foxconn now co-operate Osaka-based Sakai Display Product Corp., which ships panels to TV manufacturers including Samsung and Sharp. The company has fallen on hard times recently, incurring a net loss of almost $1.9 billion in the fiscal year ending March 2015.