Foxconn reported to ink Sharp deal next week, pay smaller bailout

Posted:
in General Discussion edited March 2016
After a series of false starts, Apple supplier Foxconn has successfully reached an agreement to buy out embattled Japanese tech giant Sharp and will ink an official deal next week, local reports say.


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


Japanese outlets, including the Nihon Keizai Shimbun, on Friday reported the two companies reached amicable acquisition terms after an unexpectedly drawn out negotiation process, according to Reuters. The same publications report Foxconn is set to offer 100 billion yen (about $884.4 million) for newly issued Sharp shares, down from an original 489 billion yen.

When rumors of the takeover bid first circulated in February it was estimated that Foxconn would pay out some $5.5 billion for Sharp's assets. That figure quickly grew to $6.25 billion, a result of a bidding war with the Innovation Network Corporation of Japan.

The deal was postponed after Sharp reported undisclosed liabilities of up to 300 billion yen. To put the agreement back in the black, Foxconn was said to have asked Sharp lenders Mizuho Bank and Bank of Tokyo-Mitsubishi UFJ to buffer against potential liabilities. The Taiwan manufacturer also suggested Sharp sell shares held by the banks at a lower rate, granting Foxconn controlling interest for 100 billion yen.

Apple is likely to benefit from the agreement as it currently does substantial business with both companies. Foxconn assembles a large majority of Cupertino's devices, while Sharp provides LCD displays used in various product lines. Apple is also thought to hold a stake in Sharp after it reportedly paid for half of a 100 billion-yen LCD plant upgrade.

Comments

  • Reply 1 of 5
    brakkenbrakken Posts: 687member
    The Japanese govt will regret losing the biz to Taiwan. 
  • Reply 2 of 5
    MacProMacPro Posts: 19,787member
    Got to wonder if Apple had some influence behind the scenes for its own reasons.
    edited March 2016
  • Reply 3 of 5
    This stock my supernova from $1 to $20 a share because of it being connected with apple. Think $AQXP or $KBIO
  • Reply 4 of 5
    BlasterBlaster Posts: 97member
    Foxconn may be a Taiwanese company, but the factories are still in China.  Everybody likes to complain about China's culture of cheap junk products, government sponsored censorship, hacking and industrial espionage.  But many of these same complainers seem to have no problem with Apple's products being built there.  Why is that?
    edited March 2016
  • Reply 5 of 5
    Blaster said:
    Foxconn may be a Taiwanese company, but the factories are still in China.  Everybody likes to complain about China's culture of cheap junk products, government sponsored censorship, hacking and industrial espionage.  But many of these same complainers seem to have no problem with Apple's products being built there.  Why is that?
    Simple. How much would the assembly costs increase if companies changed from Chinese salaries to American Union salaries for the same lines of assembly workers.
    cancelling trade deals and adding tariffs won't bring factories back. You need the salaries in those countries to be a lot closer to American salaries for that to work. The tariffs are just an additional tax on a company.
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