Sharp, Foxconn to enter talks over $5.5B takeover bid, report says

Sharp reportedly plans to enter talks with Foxconn over a takeover bid that could be worth some $5.5 billion, suggesting an end is near for Foxconn's bidding war with Innovation Network Corporation of Japan.

While a deal has not yet been inked, sources told The Wall Street Journal on Thursday local time that Sharp is about to enter "exclusive talks" with Foxconn over a potential sale. The development was first reported by Japanese public broadcaster NHK.

Last week, Foxconn CEO Terry Gou is said to have flown to Japan to up his bid to 659 billion yen (about $5.5 billion), in hopes of swaying Sharp officials. INCJ's bid is estimated to have topped out at 300 billion yen.

If a deal is indeed in the offing, it must pass muster with Japanese officials. For that reason, spectators believed Sharp would ultimately accept an offer from INCJ, the local government-backed entity that facilitated the merger of Hitachi, Sony and Toshiba's display units. Foxconn's offer was likely a sweeter deal, however, as the company agreed to pay off Sharp's substantial debt accrued over the past years.

Apple does significant business with both companies, leaning on Sharp for displays and Foxconn for assembly of nearly all products designed in Cupertino.

Apple is also thought to hold an interest in Sharp's LCD business after reportedly funding part of the Japanese firm's transformation of its Kameyama LCD plant from HDTV production to a line better suited for portable devices. While exact figures remain sealed, it is estimated that Apple provided more than half of the 100 billion yen transition cost in return for operational control.

3 Comments

ksec 1502 comments · 18 Years

About 8 years ago

For those who dont know, Foxconn is also a major shareholder of Innolux.

Thanks for the downvote.

flaneur 4525 comments · 14 Years

ksec said:

For those who dont know, Foxconn is also a major shareholder of Innolux.

Thanks for the downvote.

But Innolux has nothing to do with this story, it seems, whether Foxconn owns a piece of it ot not.

Maybe you're confusing it with Innovation Network Corporation of Japan, the INCJ in this story, which is the entity formed from Sony, Toshiba, et al., into Japan Display, supplier of iPhone panels. I see there is a branch in Taiwan. Is that maybe partially owned by Foxconn?

Anyway, this seems to be a big deal for Japan from a cultural point of view. Have there been other examples of non-Japanese companies buying in to such flagship technology firms?

flaneur said:

ksec said:

For those who dont know, Foxconn is also a major shareholder of Innolux.

Thanks for the downvote.

But Innolux has nothing to do with this story, it seems, whether Foxconn owns a piece of it ot not.

Maybe you're confusing it with Innovation Network Corporation of Japan, the INCJ in this story, which is the entity formed from Sony, Toshiba, et al., into Japan Display, supplier of iPhone panels. I see there is a branch in Taiwan. Is that maybe partially owned by Foxconn?

Anyway, this seems to be a big deal for Japan from a cultural point of view. Have there been other examples of non-Japanese companies buying in to such flagship technology firms?

It just means Foxconn will have a much better leverage against the giants. There are only four left; Samsung, LG, JDI and Sharp, in terms of Premium LCD Panel Display maker.
So while Innolux can concentrate on the lower end of the market, Sharp will concentrate on premium and Phone panel, likely securing more iPhone orders. It will also means Apple has one more option to go before they have to resought to Samsung.

What Foxconn is doing is also creating an ecosystem. Their plan also mention an alliance with JDI, which should potentially mean any Foxconn customers gets to both JDI and Sharp Display Panel a lot easier.

And since Foxconn doesn't sell its own TV set, it is now the most likely player to get Apple an true Apple TV set instead of the current STB.

I am not aware of any large Japanese companies local asset being sold to foreign firms. Most of the deals were to do with overseas asset in EU and US.

This is a big risk for Foxconn, I am hoping Apple has its place in this deal.