Foxconn to slurp Sharp for US$5.6 BEELLION

All done bar the paperwork

Foxconn's CEO Terry Gou says Sharp will be slurped into the Chinese manufacturer's maw by the end of February.

According to Reuters, executives of the two companies have reached a consensus about the main details of the ¥659 (US$5.6 billion) deal.

“We have a consensus”, he reportedly said. “The rest is a process … I don't see a problem completing this process”.

It's not the first time the two companies have tried to hook up. In 2012, Foxconn (officially Hon Hai Precision Industry) offered to take a 9.9 per cent stake in Sharp for ¥66.9 ($806 million at the time). Those talks stalled because in spite of huge losses, Sharp was uneasy at the amount of boardroom control Foxconn wanted.

In spite of its prey's continuing losses, Foxconn seems to think Sharp's still worth roughly the same, since the 2012 talks valued the takeover target at ¥676 billion, barely different from today's price.

Foxconn rose to public prominence by scoring the gig to make Apple's iPhone, but does rather more than assemble phones and does it for lots of clients and in locations beyond China.

Why might Sharp help Foxconn's business? The Japanese company offers strategic technologies like flexible screens that could be attractive to smartphone-makers like Apple and Samsung. Both companies are, however, struggling to convince an apparently-jaded public to upgrade their smartmobes.

Reuters also notes that low-cost Chinese brands are on the rise, and competition from South Korea and China has made a huge dent in Sharp's LCD business.

The Japanese government, wielding cash from a state-backed fund, had hoped to keep the company out of Foxconn's clutches. ®

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