Taiwan’s Foxconn Technology Group, formally known as Hon Hai Precision Industry Co. Ltd., agreed to acquire Japan’s Sharp Corp. at a big discount to its original offer.
Foxconn will pay about US$3.5 billion for a two-thirds stake, cutting its initial offer by nearly US$900 million following the emergence of previously undisclosed liabilities at Sharp, Reuters reported.
The deal marks the largest acquisition by a foreign company in Japan’s insular tech industry and the end of independence for a 100-year-old company that started out making belt buckles and mechanical pencils.
It also gives the world’s top electronics contract manufacturer control of Sharp’s advanced screen technology which it does not have, and helps strengthen its pricing power with major client Apple Inc.
Under the revised terms, Foxconn will pay 88 yen (78 US cents) per Sharp share, the companies said in a statement, a 35 percent discount to Wednesday’s close.
Foxconn has also agreed to buy all 200 billion yen (US$1.7 billion) worth of preferred shares owned by Sharp’s two main creditor banks, the news agency said, citing a source familiar with the matter.
It also has the option of increasing its stake in Sharp next year.
The firms had been on the verge of finalizing terms last month when contingent liabilities at Sharp were suddenly revealed, causing Foxconn to hit the pause button on the deal.
That revived ill will from four years ago, when Foxconn agreed to take a stake in Sharp as part of a broader partnership.
Sharp then warned of losses and Foxconn walked away as shares in the Japanese firm sank.
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