Sharp’s board voted unanimously to accept the offer over a rescue by a state-backed investment fund, sources said, declining to be identified as they were not authorised to speak on the matter.
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Foxconn, known formally as Hon Hai Precision Industry Co Ltd (2317.TW), said that Sharp on Wednesday morning had “couriered over a new key document to the management of Hon Hai”.
Teruo Asamoto, professor at Kyushu Sangyo University, said Foxconn’s ample resources would also enable much-needed investment in next-generation display technology, including for OLED (organic light-emitting diode) screens which Apple is said to be adopting in its iPhone around 2018.
Century-old Sharp was once a highly profitable manufacturer of premium TVs and a favored screen supplier to Apple.
At today’s price, Sharp is worth 1.3 trillion yen. We have to postpone the signing before both sides can reach an agreement.
The two companies will hold a press conference to announce details of what Foxconn intends to do with the Japanese corporate icon, known for its high-end liquid crystal display panels. INCJ, on the other hand, had planned to restructure Sharp by spinning off its businesses.
The Taiwanese firm, which is heavily involved in the production of Apple’s iPhone and iPad products, will pay around 650 billion yen (£4.1bn) to acquire the Japanese company, having made an initial bid last month.
News of the deal sent shares in Sharp spiralling lower by 14.37% overnight to 149.0 yen in Tokyo, with trading having been halted at one point during the session.
Sharp’s board has just undertaken a two-day meeting to mull over competing takeover offers, but it seems there was only ever one likely victor.
In addition, Hon Hai has also promised not to leak Sharp’s technology know-how and to maintain its employment levels after the acquisition.
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After Gou directly explained Foxconn’s enhanced offer to Sharp’s executives at the end of January, Sharp began leaning Hon Hai’s way.
