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Report: Apple manufacturer Foxconn acquires Sharp for $6.2 billion [U: Probably]

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Update: The WSJ reports that the deal is not yet certain. Sharp may come with some potential financial risks, which Foxconn is evaluating before it actually signs the deal.

Foxconn Technology Group said Thursday it is delaying the signing of a definitive takeover agreement with Sharp Corp. due to new details that the Japanese electronics maker disclosed a day earlier.

Foxconn didn’t elaborate in its statement, but people familiar with the matter said that the Taiwanese iPhone assembler is putting the Sharp deal on hold after reviewing the Japanese firm’s future financial risk. The people said Foxconn received a list of about ¥350 billion yen worth of “contingent liabilities” from Sharp on Wednesday.

Contingent liabilities are costs that a company might face in the future, based on the outcome of lawsuits, accounting changes, supply contracts or other uncertainties.

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. Now, Japanese news outlet Nikkei Asian Review reports that Sharp has accepted an offer from Taiwan’s Hon Hai Precision Industry, better known as Foxconn, for $6.2 billion.

It was initially reported last year that Foxconn was looking to acquire Sharp with an investment from Apple. That rumored deal proposed that Foxconn would hold a majority stake in the company, while Apple would be on the board as an investor. It’s unclear at this point if the deal Sharp accepted from Foxconn included an investment from Apple or not.

Sharp had faced a choice between Hon Hai’s takeover bid and support from the Innovation Network Corp. of Japan, a state-backed fund. The fund offered Sharp a 300 billion yen injection as well as a 200 billion yen credit line.

With Foxconn having now acquired Sharp, the company is put in a position where it can start to actually make iPhone components, going beyond its current role of assembling the devices.

Sharp’s Kameyama Plant No. 1 in Japan is solely dedicated to producing iPhone displays. Apple initially invested $987 million to transform the plant from an HDTV panel plant to a smartphone LCD factory.

Whether Apple is involved in the deal or not, it’s good news for the Cupertino company. iPhone displays are currently manufactured by Sharp, Samsung, and LG, with Foxconn handling the assembly process. For Apple’s part, it should no longer have to worry about one of its iPhone manufacturing partners going out of business and being unable to fulfill orders.

Apple has reportedly been beefing up its role in the display industry recently. The company reportedly opened a secret production laboratory in northern Taiwan last year to work on developing thinner and brighter displays. Should Apple play a role in the Foxconn acquisition of Sharp, it will gain access to a variety of new talent and resources. Even if Foxconn is the only player in the deal, Apple has such a strong relationship with the manufacturer that it will surely benefit from the deal.

We should know more about Apple’s role in the deal when Sharp and Foxconn officially release details. Until then, it’s unclear how big of a role Apple played in the acquisition process.

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Comments

  1. AeronPeryton - 8 years ago

    I look forward to a future when my next iPhone says “Made in Japan”.

    • Seika - 8 years ago

      (some parts) Made in Japan
      Assembled in Taiwan
      Finished in USA <== not sure how, but just imagining stuffs for the list :D

      • AeronPeryton - 8 years ago

        I think you missed my point. Sharp already has fabs and plants in Japan that now belong to Foxconn. With the exception of shipping in things like the A series chips, an iPhone can go from raw components to a finished product without leaving the country. And since I live in Japan, chances are the phone I buy here would have been made here as well.

    • rnc - 8 years ago

      Some iPhone screens are made in Japan (Japan Display).

  2. Seika - 8 years ago

    Missing out on the older news.
    How is the relationship with Sharp’s other business ? They’re quite big, making things from copy machine to fridge to electronic components.

    • taoprophet420 - 8 years ago

      Foxconn bought 65.9% of Sharp. Solar panel manufacturing has been a major part of sharp recently, it’s hard to know what will happen to that business.

  3. Leaf (@1amleaf) - 8 years ago

    This is huge! We know Sharp developed the Aquos Crystal phone and Dell laptops with super thin bezels

  4. taoprophet420 - 8 years ago

    Foxconn has not signed the deal yet, do to Sharp changing the terms of the agreement.

  5. taoprophet420 - 8 years ago

    CNBC WORLD said it was the terms of the deal not the financials when I posted that Foxconn had not signed the deal yet.

  6. Ahmed El Zoughby - 8 years ago

    Is the acquisition includes all of sharp business? Air conditioning and other house elections in specific? Or it just part of TVs and Monitor…

  7. Ahmed El Zoughby - 8 years ago

    Would that includ the home electronics? Air conditioning etc? Or just the TVs and Monitor Panels?

  8. If the deal is signed and Foxconn obtain more investment from Apple into Sharp, in future, Apple will own its own display maker indirectly to save the cost of Iphone , Ipad & Imac screen paid to Korea maker. Japan is no. 1 in hardware technical that we Taiwanese know much better than any other countries due to historical reason. For software wise , US is no 1. due to their English languang power and their innovation capability which is lack by Japan or Taiwan. We can forsee the strong alliance between Foxconn, Sharp and Apple, more I-product can be expected by using Sharp technical plus Apple like I-car, I-solar, I-air cleaner … to dominate the world consumer market.

Author

Avatar for Chance Miller Chance Miller

Chance is an editor for the entire 9to5 network and covers the latest Apple news for 9to5Mac.

Tips, questions, typos to chance@9to5mac.com