Arab Today, arab today taiwans hon hai seals sharp takeover for 35bn
Last Updated : GMT 01:06:49
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Taiwan's Hon Hai seals Sharp takeover for $3.5bn

Arab Today, arab today

Arab Today, arab today Taiwan's Hon Hai seals Sharp takeover for $3.5bn

Sharp remains one of Japan's best-known corporate brands despite its financial problems
Taipei - AFP

Taiwan's tech giant Hon Hai said Wednesday it had finally sealed a takeover of Japanese electronics maker Sharp in a "historic" deal worth 389 billion yen ($3.5 billion).

It is the first foreign acquisition of a major Japanese electronics firm and comes after weeks of delays, with Hon Hai buying a 66 percent controlling stake.

But the cash injection from Hon Hai -- the multinational owner of Foxconn, the world's biggest iPhone and iPad assembler -- is well down from the original 489 billion yen put on the table in February.

Hon Hai put the brakes on the takeover last month, soon after it was first announced, to review new information from Sharp believed to relate to the company's sizeable liabilities.

Hon Hai's colourful founder Terry Gou said he was "thrilled" by the "strategic alliance".

"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," he said in a joint statement.

Sharp's president and CEO Kozo Takahashi added that the move would merge forces and "accelerate innovation".
The joint statement, issued at a news conference in Taipei, described the takeover as an attempt to revive Sharp's flagging fortunes and called it a "historic strategic alliance".

"We are committed to restoring profitability and strengthening operations to once again make Sharp a leader in the global electronics arena and a world-class company with a positive outlook," it said.

Hon Hai will pay 88 yen per share. A spokesman said the deal would be signed in Osaka on Saturday.

Separately, Sharp warned on Wednesday it expects an operating loss of 170 billion yen in the current fiscal year, reversing earlier expectations of a small profit.

Sharp has teetered on the edge of bankruptcy for years and billionaire Gou has long been pushing for a takeover.

The two firms have worked together on large-screen technology, including for televisions, and jointly operate a liquid crystal display (LCD) panel plant in Japan.

Still, the Japanese government had reportedly been concerned about Sharp's key technologies falling into the hands of a foreign firm.

- Tech leader Sharp -

Sharp is still a leader in LCD technology and remains one of Japan's best-known corporate brands overseas despite its bleeding balance sheet.

But the century-old company piled up eye-watering losses after the 2008 global financial crisis and a restructuring plan has yet to pull it out of the red.

In February Sharp said its net loss in the April to December period came in at a whopping 108.3 billion yen, way up from the year before.

"For Sharp, this is the first step toward normalisation and it will make the company a buy for investors again," said Hideki Yasuda, an analyst at Ace Research Institute in Tokyo.

"This deal proves that Japanese electronics firms are still attractive for foreign rivals.

"Sharp has competitive know-how and technologies. For Hon Hai, it's a good buy. It wanted a brand for finished products and it can make use of the Sharp name," Yasuda said.

Taiwan's Fubon Securities said Hon Hai would be able to manage Sharp's losses.

"This deal will be positive for both Hon Hai and Sharp. The former's integration of Sharp's panel technology will help the latter improve its factory utilisation," it added in a note.

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Arab Today, arab today taiwans hon hai seals sharp takeover for 35bn Arab Today, arab today taiwans hon hai seals sharp takeover for 35bn

 



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