Taiwan’s Foxconn to buy Japan’s 104-yr-old icon Sharp for $3.5 bn

The Taiwanese company that assembles Apple's iPhones agreed on Wednesday to buy control of financially struggling Sharp Corp for $3.5 billion in the first foreign takeover of a major Japanese electronics producer.

The acquisition by Foxconn unites Sharp, a pioneering electronics brand founded in 1912, with a company six decades younger that is little known to consumers but has grown rapidly as a contract manufacturer for global brands.

The commitment by Foxconn, also known as Hon Hai Precision Industry Co, to buy 66 per cent of Osaka-based Sharp followed weeks of uncertainty over what the Japanese company said was a deal at a higher price.

"I am thrilled by the prospects for this strategic alliance and I look forward to working with everyone at Sharp," said Foxconn founder Terry Gou in a statement. "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." 

The price of 389 billion yen was a reduction of 100 billion yen, or about 20 per cent, from the 489 billion yen ($4.4 billion) that Sharp said February 25 that Foxconn had agreed to pay. The Taiwanese company said at that time it wasn't ready to sign a deal. The companies gave no reason for the change but news reports suggested Foxconn was concerned about taking on additional liabilities it learned about late in negotiations.

Speaking to reporters at the Taipei stock exchange, a Foxconn board member, Tai Jeng-wu, was asked what the company's strategy was for reversing Sharp's losses. He said plans called for the Japanese company to "upgrade its technology" but gave no details. Foxconn said a final agreement is due to be signed Saturday.