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Foxconn finally agrees to buy Sharp for $3.5 billion

Deja vu? The Foxconn acquisition of Sharp was almost a done deal a few weeks ago, until Sharp revealed some additional liabilities at the eleventh hour it had not previously disclosed. This meant Foxconn had to go back to the drawing board and re-assess the deal, renegotiating some parts of the contract with Sharp. The initial offer was worth $6.2 billion. Today, the companies announced Foxconn will buy Sharp in a $3.5 billion dollar deal.

The deal is seen as a big win for Foxconn, which wants to elevate itself further up the technology chain moving from a ‘simple’ assembler to a vital part of the supply chain. Sharp primary makes LCD displays for smartphones and tablets.

With the buyout, Foxconn is well positioned to negotiate with Apple for future iPhone screen production, given the two companies are already good partners for the assembly side. Outside of its deals with Apple, Foxconn-as-a-screen-display-manufacturer gives it another potential source of revenue, as it looks to become less dependent on iPhone and iPad production given Apple’s slowing growth and unit sales.

The deal was meant to close in February, but Sharp accountants reported significant liabilities at the last minute: naturally, Foxconn ‘went berserk’. However, the companies have finally resolved their differences with the official announcement today of the acquisition. The cost of the liabilities is reflected in the lower purchase price than the original offer.

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Comments

  1. Ahmed El Zoughby - 8 years ago

    Are they buying Sharp as a whole business or just the LCD panels and TVs business? Sharp has other big home appliances businesses…

    • taoprophet420 - 8 years ago

      Originally it was a 60% stake in Sharp, or a total acquisition like some outlets tried to portray it. I have seen a few rumors of the final deal the past week, but. To sure what they agreed upon.

    • taoprophet420 - 8 years ago

      It’s the entire business with Foxconn purchasing 66% of Sharp’s stock. It’s has up to 3 years to buy the stocks from The 2 Japaneese banks that bailed on Sharp last year. That would increase the amount of the deal by 100 billion yen or about $900 million.

      • taoprophet420 - 8 years ago

        They will sign the contract Satiraday.

  2. tortri - 8 years ago

    So now will there be TVs that say FOXCONN on the front of them for a cheaper price?

    • standardpull - 8 years ago

      Foxconn is going to want a decent financial return on its 3.5 billion dollar investment. So I don’t see them wanting to reduce product prices. In fact, they have a strong incentive to increase their income.

Author

Avatar for Benjamin Mayo Benjamin Mayo

Benjamin develops iOS apps professionally and covers Apple news and rumors for 9to5Mac. Listen to Benjamin, every week, on the Happy Hour podcast. Check out his personal blog. Message Benjamin over email or Twitter.