Foxconn suspends acquisition of Sharp deal to clarify key documents
2016-02-26 00:00
Netease Technology News, February 25, according to Reuters, Sharp announced on Thursday that it agreed to the acquisition offer of Taiwanese company Foxconn, but the latter said that it needs to clarify the terms and is not yet ready to sign the agreement. If the deal goes through, it will be the largest foreign acquisition in the history of Japan's technology industry.
Sharp announced today that it will issue about $4.4 billion worth of shares to Foxconn, allowing the latter to hold a stake in 2/3. A person familiar with the matter said that Foxconn's investment will exceed 650 billion yen (about 5.8 billion US dollars). If the agreement is signed, Foxconn's status as Apple's main agent will be greatly improved, and Sharp will be able to start mass production of OLED displays around 2018. It is expected that Apple will begin to adopt this sub-era display on its iPhone around this time.
Sharp released a 31-page note detailing the agreement proposed by Foxconn, but the latter issued a statement later, saying that Sharp "delivered a new key document" on Wednesday morning and needed Sharp to clarify the document. Foxconn has already given this high knowledge to Sharp.
After Sharp agreed to Foxconn's acquisition agreement but before Foxconn made the above statement, Sharp's share price fell sharply by 14% because the proportion of equity dilution was greater than market expectations. Trader pointed out that the agreement included the issuance of a stock that could be converted next year. Before Sharp announced its decision, Foxconn founder and billionaire Terry Gou launched a five-year pursuit of the Japanese company. He believed that the acquisition of Sharp would better counter Asian competitors such as Samsung Electronics. Hong Kong Brokers Parry International Trading Ltd. Gavin Parry, managing director of, said: "Sharp has the technology to act as an Apple supplier to compete with Samsung, which means Foxconn can help Apple reduce its dependence on Samsung when Sharp is included." "This gives Foxconn better bargaining power when it comes to Apple," he added."
Sharp Chief Executive Kozo Takahashi said the company's board unanimously agreed to accept Foxconn's offer rather than a competing proposal from the Japanese government-backed fund.
Sharp said it wants to become a global supplier of OLED displays, which are thinner and more flexible than current displays. South Korea's Samsung and LG have both invested heavily in the new technology.
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2016-03-15
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