‘Foxconn offers $5.3 bln for Sharp, plans to keep management ‘
Taiwan’s Hon Hai Precision Industry Co has offered 625 billion yen ($5.3 billion) to buy Sharp Corp and has no plans to replace top management, a gesture aimed at reassuring Japanese authorities worried about an overseas takeover, the Wall Street Journal reported.business Updated: Jan 21, 2016 14:04 IST
Taiwan’s Hon Hai Precision Industry Co, also known as Foxconn, has offered 625 billion yen ($5.3 billion) to buy Sharp Corp and has no plans to replace top management, a gesture aimed at reassuring Japanese authorities worried about an overseas takeover, the Wall Street Journal reported.
Shares in the embattled electronics maker, which is considering a separate proposal from a state-backed fund, the Innovation Network Corporation of Japan (INCJ), jumped more than 20 % after the report.
Sources have told Reuters that INCJ is in the lead to rescue Sharp and plans to merge its LCD business with rival Japan Display Inc, in which the fund already has a major stake.
The fund is also considering merging Sharp’s home appliances business with Toshiba Corp’s, sources have also said.
Media reports have said the fund is offering 300 billion yen in a bailout, and sources have said such a bailout would also involve Sharp’s lenders offering at least 200 billion yen by converting debt to equity.
Government officials have told Reuters that they prefer a Japanese buyer because they want Sharp’s display technology to stay in Japan.
Sharp, once a leader in high-end displays for smartphones and TVs, has struggled with persistent pricing pressure from Asian rivals. It received a second bailout worth $1.7 billion in May, but has shown few signs of a turnaround.
Japanese media had previously reported that Hon Hai was offering as much as 700 billion yen for Sharp, although Reuters has not verified such a bid.
Previous tie-up talks between Hon Hai and Sharp fell through in 2012 after the Japanese company balked at demands that it said would have given the Taiwanese firm too much control. The two remained in contact and jointly operate a plant in Osaka, western Japan, that makes large LCD panels.