Foxconn acquires majority stake in Sharp for €3.1 billion

Foxconn has acquired a majority stake in Japanese company Sharp. The acquisition involves an amount of 389 billion yen, equivalent to approximately 3.1 billion euros. This amount is lower than previously suspected.

The majority stake that Foxconn acquires is 66 percent, Bloomberg reports. Earlier there were rumors that the deal would be sealed this week, which appear to have been confirmed. At the time, there was already talk of the reduced amount of 3.1 billion euros. At the end of February, the Taiwanese Foxconn still offered 5.3 billion euros, but the company withdrew this offer shortly afterwards because new financial information had come to light.

It turned out that Sharp would carry an estimated financial risk of 2.4 billion euros. As a result of that information, Foxconn eventually reduced the amount to the current bid. Sharp had already rejected an offer from the Japanese company Innovation Network Corp., according to Bloomberg.

Through the acquisition, Foxconn wants to focus on direct sales to consumers in addition to producing and assembling products, such as Apple’s iPhones. Foxconn CEO Terry Gou had for that reason Sharp in the spotlight for some time, in 2012 he made a failed attempt to take over the company for a price that was many times higher than the current one. In that year, Foxconn did acquire a minority stake in the Japanese company.

In addition, Foxconn probably wants to rescue ailing Sharp to secure LCD supplies for its smartphone and tablet customers. Sharp panels are used in many products Foxconn manufactures.