Foxconn’s proposed acquisition of Sharp, a deal that was sensationally put on hold last month after Sharp had announced it, has been completed today after both companies confirmed the agreement.
In a statement, Foxconn confirmed that it is paying close to 389 billion yen (around $3.5 billion) for a majority 66 percent stake in Sharp — spread across a number of companies. That’s a lot less than the proposed $6.2 billion fee that Sharp announced one month ago, and it reflects that Foxconn held the deal up over last-minute concerns around the viability of the Sharp business and its recent financial performance.
As we wrote back in February, the deal is the largest overseas investment in a Japanese company, and for that reason it has raised plenty of eyebrows domestically in Japan. Particularly since Sharp rejected a rival, Japan-based bid from state-backed Innovation Network Corp, which had proposed splitting Sharp and its display business, and integrating the latter into Japan Display, an LCD joint venture between Sony, Toshiba, and Hitachi. State-backed bailouts have become the norm in Japan, where major electronics firms have struggled in recent years, but Sharp picked a different path.
The deal is strategic to Foxconn because it promises to boost the Taiwan-based manufacturer’s capabilities by adding Sharp’s technology, and in particular its much-heralded low-power display business. That could help Foxconn increase its leverage and business with Apple, its most lucrative customer, and bolster its business with other new clients and business.
“I am thrilled by the prospects for this strategic alliance and I look forward to working with everyone at Sharp,” Terry Gou, Foxconn CEO and founder — who failed in a Sharp investment bid in 2010 — said in a statement. “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.”