It looks like the on-off acquisition of display-maker Sharp by iPhone assembler Foxconn is back on. The WSJ reported earlier that the two companies have been discussing a significantly lower valuation for the company, and Reuters now reports that share trading in Foxconn has been suspended due to a “major announcement.”
Japan’s Sharp Corp and Taiwan’s Foxconn are set to sign a merger deal this week after repeated delays, with the two sides set to agree on a smaller bailout than originally planned for the troubled Japanese electronics maker, two sources familiar with the talks said.
The deal is expected to be finalised during board meetings by both companies tomorrow for around $2B less than originally discussed, after a rather stormy journey.
Foxconn originally bid $5.3B for Sharp back in January. In February, the deal was said to have been concluded for $6.2B – before a later report threw doubt on this. Foxconn’s acquisition team reportedly “went berserk” when they learned of Sharp’s potential liabilities. Negotiations resumed, with Foxconn seeking concessions from two banks holding some of the shares as security for loans.
It had been reported at one point that Apple might be backing the deal in some way, perhaps with an injection of cash, but all has been quiet on that front, so we can probably now dismiss this.
Photo: Reuters/Bobby Yip
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Yet more consolidation / acquisition of Japanese manufacturers by other Asian (Korean or Chinese) conglomerates!
Much like the American oil companies in the 20th century – survival of the fittest I guess.