Loss-making Japanese consumer electronics giant Sharp Corp. has agreed to a 700 billion yen (US$6.2 billion) rescue from Taiwan’s Foxconn Technology Group, Bloomberg reported Thursday, citing the Nikkei media service.
Foxconn, the trading name of Hon Hai Precision Industry Co. Ltd., beat out state-backed fund Innovation Network Corp. of Japan.
The board of century-old Sharp, which is saddled with debt and struggling with chronic losses, had to choose between INCJ’s plan to restructure by spinning off businesses, or staying whole but under a foreign parent.
A successful deal would mean Foxconn, the main assembler of Apple Inc.’s iPhone, takes over one of the largest suppliers of screens for phones and tablets.
Foxconn chairman Terry Gou Tai-ming is seeking to add the manufacture of key electronics components and devices to his firm’s core business of assembling products for Apple and other global brands such as Sony and Microsoft.
The battle for Sharp has been seen as a test of Japan’s willingness to open its economy, following Prime Minister Shinzo Abe’s appeal for market reforms and overseas investments to boost growth, Bloomberg said.
Struggling companies have long been able to rely on the country’s government and banks for support.
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