Business

Foxconn, Sharp confirm $3.5 billion takeover bid

The two companies have agreed on a sum which has been roughly halved at the last minute due to concerns relating to Sharp's finances.

Written by Charlie Osborne, Contributing Writer March 30, 2016 at 3:43 a.m. PT

After months of bargaining and last-minute rapid recalculations, the board members of both Sharp and Foxconn have agreed to a takeover bid worth approximately $3.5 billion.

Featured

I tested Lenovo's dual-screen laptop and it improved my productivity in profound ways
Samsung Galaxy Book 4 Ultra review: Should Windows users consider anything else?
Nothing's new $99 earbuds are the most stylish ones I've tested (and almost perfect)
The most charming projector I've tested has now replaced my TV for movie nights

Manufacturing giant Foxconn, also known as Hon Hai, has agreed to pay almost 389 billion yen for a controlling stake in Sharp, the companies said in a press release (.PDF) on Wednesday.

Details relating to the issuance of new common shares are below, as well as how Foxconn's new stake percentages have been spread across a number of Foxconn's companies:

Sharp had previously agreed to a takeover bid worth $6.2 billion. However, reports surfaced earlier this month suggesting a closer look at the ailing firm's financials had given Foxconn a case of cold feet -- and the bid was reduced over potential liabilities and future earnings.

Sources have told media that particular financial liabilities, previously undisclosed by Sharp, could be billions of dollars.

Despite these risks, the move to acquire a controlling stake in Sharp may be an important one in strengthening Foxconn's future. The move not only grants Foxconn access to Sharp's display technologies and businesses, but also paves the way to securing new clients and additional leverage in existing contracts, such as with iPad and iPhone maker Apple.

For Sharp, the takeover means salvation from what could have been financial ruin.

Terry Gou, Founder and CEO of Foxconn commented:

"I am thrilled by the prospects for this strategic alliance and I look forward to working with everyone at Sharp. 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."