Foxconn, also known as Hon Hai Precision Industry, is paying JPY389 billion ($3.5 billion) for a 66 per cent stake in Sharp, having reduced its offer for the troubled Japanese electronics maker by about $900 million earlier this month.
In a joint statement, the two announced a “historic strategic alliance” and said they “are committed to restoring profitability and strengthening operations to once again make Sharp a leader in the global electronics arena and a world-class company with a positive outlook.”
“We are confident about our future together, as both Foxconn and Sharp have been working very closely and successfully since 2012,” the statement added.
According to Terry Gou, CEO of Foxconn, said, “We have much that we want to achieve and I am confident that we will unlock Sharp’s true potential and together reach great heights.”
A decision on the original deal was expected in late February but was delayed because Foxconn was reviewing its bid after the disclosure of a list of contingent liabilities of about JPY300 billion as well as the deterioration of Sharp’s earning for the fiscal year ending 31 March.
The deal is the largest overseas investment in a Japanese company,
In early March Japanese banks Mitsubishi UFJ Financial and Mizuho Financial said they were willing to give additional aid to the takeover. Sharp has a total JPY700 billion in interest-bearing debt.
Sharp said earlier it would issue about $4.5 billion in new shares to give Foxconn a two-thirds stake.
This is not the first time Foxconn has made a bid for the Japanese company. Back in 2012, Foxconn tried to acquire a 10 per cent stake in Sharp, but the deal fell through.