Foxconn agrees to buy Sharp for $3.5 billion

The boards of Sharp and Taiwanese multinational electronics manufacturer Foxconn have agreed a takeover deal that will see the ailing Japanese CE giant accept a reduced offer of £3.5 billion (£2.4bn).

Despite the offer being some $2.5bn lower than Foxconn’s previous offer, Sharp and Foxconn said in a joint statement that they are committed through this strategic alliance to “restoring profitability and strengthening operations to once again make Sharp a leader in the global electronics arena”.

President and chief executive of Sharp Kozo Takahashi said of the deal: “I am pleased with our decision to form a strategic alliance and merge forces between Sharp and Foxconn to accelerate innovation with the creativity and entrepreneurial spirit of both our companies.”

Foxconn founder and chief executive Terry Gou added: “I am thrilled by the prospects for this strategic alliance and I look forward to working with everyone at Sharp. 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.”

Sharp has also said that it expected an operating loss for the fiscal year ending this month – ¥170bn (£1.05bn) on sales of ¥2.45 trillion, as opposed to the previously predicted profit of ¥10bn.

Analysts have speculated that the Taiwanese giant hopes that acquiring Sharp will facilitate its plans to expand into the next-generation displays market, and help it move up the value chain by manufacturing smartphone screens – the most expensive component in such devices. Sharp currently makes the screens for the Apple iPhone.