Japan’s Sharp is “devoting more resources to checking Foxconn’s offer”, which is worth $5.5 billion, over a rival bid by Innovation Network Corp of Japan (INCJ), its CEO said.
According to The Wall Street Journal, Kozo Takahashi said “the two offers are not equal” although Sharp will continue discussions with INCJ.
The INCJ is reportedly offering less than half of what Taiwan’s Foxconn has put on the table, but Sharp was initially leaning towards INCJ because its display technology would remain in Japanese hands.
This raised questions about the country’s willingness to open up to foreign ownership, something Japan’s prime minister, Shinzo Abe, is keen to promote.
And now, following a board meeting about the bids, in which Foxconn’s chairman, Terry Gou, reportedly promised not to cut Sharp’s workforce, Takahashi said potential synergies and the scale of Foxconn are attractive factors.
He said Sharp’s production, sales and material-procurement operations would benefit from such a deal, adding that he does not want a breakup of Sharp and has no plans to step down.
He also said Sharp may form an alliance with Japan Display, the country’s other major producer of smartphone display panels.
The report said if a deal with Foxconn was made, it would be one of the “most prominent investments by a foreign company in Japan.”
Sharp first began talks with firms over its display unit after troubling results in October last year, blaming falling Chinese demand.
In its Q3 2015 results, it posted a net loss of ¥24.7 billion ($210 million) with revenue falling 13 per cent from a year earlier.
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.
The night before the board meeting, Foxconn said in a statement it has “a very clear plan to take Sharp forward by investing in the company and its people, by sharing our world-class experience and expertise, and by introducing our unrivaled network of global customers to Sharp’s products and its manufacturing capabilities.”