Sharp reportedly accepts $6.25B takeover bid from Foxconn

Posted:
in General Discussion edited February 2016
Following months of rumors and speculation, primary Apple supplier Foxconn has reportedly purchased embattled Japanese tech giant Sharp for $6.25 billion, beating out an offer from Innovation Network Corporation of Japan.


Sharp's Kameyama LCD plant in Japan's Mie Prefecture.


People familiar with the long-fought bidding war told The Wall Street Journal that Sharp inked a 700 billion yen ($6.25 billion) deal with Foxconn on Thursday, local Japan time. The development comes three weeks after reports claimed the two companies were about to enter serious discussions about the takeover.

As noted by the publication, Sharp's reported sale to Foxconn represents the largest foreign purchase of a Japanese company in the country's history. The development is has huge implications for Japan's tech sector; the country is notoriously protective of its assets, especially as they pertain to outside interests. Previous speculation suggested Sharp would ultimately entertain an offer from INCJ, a government-backed entity that facilitated the merger of Hitachi, Sony and Toshiba's display units.

While terms of the deal have yet to be made public, Foxconn's offer is thought to cover Sharp's substantial debt, a contingency for which INCJ was reportedly unable to account.

Foxconn's takeover of Sharp could bode well for Apple, which does significant business with both firms. Sharp currently supplies LCD displays used in various Apple product lines, while Foxconn assembles a majority of the Cupertino, Calif., company's devices.

Property ownership rights could become complex, however, as Apple is thought to hold an interest in Sharp's LCD operations. The iPhone maker is estimated to have stumped for half of the 100 billion yen Sharp spent on transitioning its Kameyama LCD plant from HDTV panels to components better suited for use in portable devices like iPhone and iPad.

Comments

  • Reply 1 of 8
    I can see where this is going...
  • Reply 2 of 8
    Oh well. That's the end of Japanese commercial tech hardware.
    I wish they'd been able to keep Sharp Japanese.
    Good luck, Foxy!
  • Reply 3 of 8
    melgrossmelgross Posts: 31,485member
    Samsung also has an investment in Sharp.
  • Reply 4 of 8
    brakken said:
    Oh well. That's the end of Japanese commercial tech hardware.
    I wish they'd been able to keep Sharp Japanese.
    Good luck, Foxy!
    Agreed. 
  • Reply 5 of 8
    MacProMacPro Posts: 18,150member
    I wonder if Tim had any involvement behind the scenes?
  • Reply 6 of 8
    brakken said:
    Oh well. That's the end of Japanese commercial tech hardware.
    I wish they'd been able to keep Sharp Japanese.
    Good luck, Foxy!
    So ... Sony is going to stop making TVs, radios, gaming consoles and smartphones/tablets? When did that happen? And Sony is much bigger than Sharp. Where the entire Sharp company was bought for $6.5 billion, that would be the quarterly profit (or loss) for a single Sony division. Oh yeah, there is also Canon, Hitachi, JVC, NEC, Seiko, Pioneer, Panasonic, Yamaha ... all of whom are as big as Sharp ever was even in their heyday when they were a moderately successful seller of TVs, radios and VHS/DVD players. Now they are getting hit hard by competition from competition by South Korea, China and Taiwan, sure, but seeing one of their smaller units being bought by a foreign company is hardly the harbinger of "the end of Japanese commercial tech hardware." What is far more likely to happen is further consolidation where some of the smaller, struggling players will continue to get absorbed by the bigger ones. The downside to that is less innovation, of course, but that is more of a reflection of internal issues in Japan (with their aging population and whatnot, plus Japan is still recovering from the double hits of the global recession and the massive earthquake/tsunami/nuclear power plant breach that was just 5 years ago ... the financial equivalent of our experiencing 9/11, the Three Mile Island disaster and the great recession WITHIN FIVE YEARS OF EACH OTHER). But the main reason why a Japanese buyer could not be found for Sharp is because they don't offer anything that the other players in the industry have anyway. Sharp makes screens and cameras? So does Sony, Toshiba, Fuji and even (to a lesser extent) Panasonic. So while Sharp was a major supplier for Apple, few Android (for example) OEMs really relied on them to a significant degree, as they went to Sony for premium products and other Japanese companies for the cheaper ones. This will result in Apple being able to streamline their supply chain by allowing them to deal with Foxconn for manufacturing as well as camera and screen components, but that is pretty much the only story here, other than Sharp being able to compete with domestic competition and there being one less good R&D company (Sharp was doing great work with solar panel R&D for example, but weren't able to profit much from it because Chinese companies were "appropriating" their innovations and using a "manufacture cheaply and dump" strategy to eliminate the competition) out there. It would have been neat for Apple to pick up their solar R&D instead, but since that doesn't appear to be a point of interest for Foxconn, it looks like their great work in that area is going to come to a standstill.
    badmonk
  • Reply 7 of 8
    The Japanese tech industry has also been hurt by Samsung's often unfair competition.
  • Reply 8 of 8
    badmonk said:
    The Japanese tech industry has also been hurt by Samsung's often unfair competition.
    The American tech industry has also been hurt by Japanese  (often) unfair competition 
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