Struggling Japanese electronics giant Sharp says it has accepted a multi-billion dollar takeover bid by Taiwanese multinational Foxconn.
Advertisement
Potentially bringing its own parts to the table, should it fully acquire Sharp, could be beneficial to Foxconn on a number of levels.
The electronics subindex rose 1.1 percent, while the financials subindex gained 0.8 percent.
Last month it was reported that Apple manufacturer Foxconn had bid $5.3 billion to acquire Japanese display maker Sharp, who has faced numerous financial and manufacturing difficulties over recent years.
Both government and Sharp officials initially backed a rescue plan by state-backed Innovation Network Corp of Japan (INCJ), fearing a loss of the company’s technological expertise to a foreign company. President Kozo Takahashi said in early February that Sharp was focusing more on Hon Hai’s proposal, although he did not rule out the INCJ offer.
A takeover by Foxconn, which assembles various electronics products such as smartphones and televisions for the likes of Apple Inc and Sony Corp, would vastly expand sales channels for Sharp’s liquid crystal display (LCD) panels. “Together they can go global”.
Media said the government was concerned about the company’s key technologies falling into the hands of a foreign firm.
Japan Inc.is littered with money-losing firms kept alive through bailouts and other assistance, partly to avoid massive job losses.
Century-old Sharp was once a highly profitable manufacturer of premium TVs and a favored screen supplier to Apple.
The company’s name once graced the jerseys of Manchester United players, but it has long since withdrawn from sponsoring the English Premier League football side.
Advertisement
This month, the firm posted a whopping nine-month net loss of more than $900 million, hit by restructuring costs and a slump in demand for its smartphone screens.
