Foxconn says agreed with Sharp on most points of a takeover deal
By Makiko Yamazaki and J.R. Wu
OSAKA, Japan/TAIPEI (Reuters) - Taiwan's Foxconn is aiming to finalize a deal to acquire Japan's Sharp Corp (6753.T: Quote) by the end of the month, after the two firms reached a consensus on most points, Foxconn Chief Executive Officer Terry Gou said.
Foxconn, known formally as Hon Hai Precision Industry Co (2317.TW: Quote), has been given preferred negotiating rights and most remaining issues to be resolved were legal and regulatory, Gou said after meeting with executives of the struggling electronics maker on Friday.
The Apple Inc (AAPL.O: Quote) supplier has offered to invest around 659 billion yen ($5.6 billion) in Sharp, sources familiar with the matter have said - which would make it Foxconn's biggest deal to date and the largest acquisition by a foreign company in Japan's insulated tech sector.
"We have a consensus," Gou told reporters. "The rest is a process ... I don't see a problem completing this process."
The meeting with Sharp executives came one day after Sharp's board decided to focus on Foxconn's offer over a rival bid from a Japanese state-backed fund.
While many investors have faith in Gou's business acumen, noting he has built up the world's biggest contract maker of electronic gadgets from scratch, buying Sharp is seen as carrying as many, or more, risks than potential benefits.
A deal would give Foxconn access to the Japanese display maker's cutting-edge technology at a time when clients such as Apple are likely looking ahead to more advanced flexible screens.
However, key concerns include slowing global sales for smartphones as well as fierce competition from South Korea and Chinese rivals that have hammered demand for Sharp's liquid crystal displays and hindered it from making a recovery despite two major bank-led bailouts in the last four years. Continued...