Sharp has agreed to sell most of itself to Foxconn

Despite the Japanese government’s insistence that Sharp remain in the hands of Japanese owners, rather than being taken over by a foreign company, Sharp has agreed to sell more than 66% of its voting stock to Foxconn for ¥489 billion ($4.34 billion). The Taiwanese company will also spend another ¥200 billion ($1.78 billion) to acquire shares held by Sharp’s lenders, however, the New York Times reported on Thursday that Foxconn has postponed the signing of the agreement until it reviews some “new material information” from Sharp.

Sharp has approved an offer from Hon Hai Precision Industry and related companies to acquire over 66 percent of the company’s voting stock, making the Taiwanese contract manufacturer the new parent of the venerable Japanese firm. The deal, which will bring to ailing Sharp funds for investment in newer technologies like OLED, will be done through the issue of new shares to Hon Hai and partner companies for 489 billion yen (US$4.4 billion). Hon Hai will also acquire shares held by lenders to Sharp for around 200 billion yen. A maker of Apple’s iPhone and other key consumer electronics products, Hon Hai, which goes by the trade name Foxconn, has long eyed Sharp for its display business and manufacturing know-how. The Japanese company is also a supplier to Apple. Sharp said it had received a commitment from Foxconn and related companies that its brand would be retained as well as its existing employees. The Japanese company, which has businesses in consumer electronics, components like camera modules, solar cells and LCDs, was earlier negotiating a deal with Innovation Network Corporation of Japan, which is backed by the Japanese government.