ASIA NEWS NETWORK
WE KNOW ASIA BETTER
Foxconn-Sharp acquisition deal postponed
Publication Date : 09-03-2013
Taiwanese multinational electronics contract manufacturing company Foxconn has decided that it will hold off its bid to acquire a 9.9-per cent stake of the Japanese Sharp, ruling out the possibility of the two companies reaching an agreement prior to the deadline of March 26, according to latest reports in Japan.
However, Foxconn was quoted as saying that although delayed, the deal is not off.
Since Foxconn's yet-unfruitful bid for Sharp began nearly a year ago, Qualcomm and Samsung have both successfully negotiated their bid for a 5- and 3.3-per cent stake of Sharp, respectively, in the interim.
With the addition of two more entities, Foxconn is beginning to feel doubtful of Sharp's proposed four-way collaboration business plan, leading to Foxconn Chairman Terry Gou's decision to halt commitment prior to the March 26 deadline, stating that the four-way relationship adds significant complexity, which the company needs more time to consider, according to commentary.
Despite the uncertainty of Foxconn's bid for Sharp, tangible collaborative results have been yielded between the two companies, following Foxconn's US$800 million investment into Sharp's 10th-generation manufacturing plant in Sakai, Japan last year, representing over half the construction cost of the facility. The plant's utilisation rate had surged to 80 per cent in an effort to supply panels for Foxconn's launching of its 60-inch TVs, according to reports.
Gou's decision is supported by Sharp's largest backers, which include Mitsubishi UFJ Financial Group, Mizuho Bank, and Resona Bank, which had agreed to jointly provide Sharp a loan of 360 billion yen last September.