£2.4bn deal comes in far lower than original agreement following several wrangles
The protracted takeover of Japanese display manufacturer Sharp could soon be completed after the company reportedly agreed a deal with Apple supplier Foxconn.
The long-running saga between the two companies appears to have finally reached an end after Foxconn reportedly agreed a deal to buy 66 percent of Sharp for 389 billion yen (£2.4bn), Bloomberg revealed.
This is far lower than the 650 billion yen (£4.1bn) figure initially revealed by Sharp last month, after Foxconn raised concerns surrounding Sharp’s financial position following the release of previously unseen information.
Sharp had in fact lost 222 billion yen (£1.34bn) last year despite major job cuts, and was bailed out by banks several times.
The deal also faced significant opposition from the Japanese government itself, which was thought to be unwilling to let Sharp fall into foreign ownership, especially given Foxconn’s links with partners such as Apple.
Government and Sharp officials initially backed a rescue plan by state-backed Innovation Network Corp of Japan (INCJ), which had planned to merge Sharp’s screen business with Japan Display in an effort to keep home-grown innovation within the country.
As it is, Foxconn’s takeover will be the first of a major Japanese company ever, and is likely to lead to a major overhaul in Sharp’s management, with Reuters reporting that Foxconn is planning to replace the CEO and much of the board.
Among the side effects of the deal could be the inclusion of more detailed and sharper screens in upcoming Apple products, as Foxconn has long been contracted by the company to manufacture its iPhone and iPad devices.
A newly-expanded Foxconn could see Sharp begin mass-producing high quality OLED screens for mobile devices over the next few years, with Apple expected to adopt this technology by 2018.
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