Foxconn Technology Group has put in a 600 billion yen (about RM22 billion) bid to buy Sharp. The Japanese electronics company is still said to be deliberating on the bid, but will be making a decision by the end of January. If it goes through, this could mark one of the largest acquisitions ever made by the iPhone assembler.
Sharp has been struggling amid stiff competition from rapidly expanding Chinese manufacturers. The company is currently saddled with some 791.8 billion yen in debt, and has racked up more than 1.1 trillion yen in loses over the last four years. Sharp’s share prices have been similarly disappointing, and have lost 53 percent of their value in 2015.
This isn’t the first time that Foxconn has approached Sharp with an investment offer. In 2012, the electronics manufacturer offered Sharp 66.9 billion yen for a 9.88 percent stake in the company. Negotiations for the deal failed after both sides failed to come to an agreement on management controls.
If it goes through, the massive 600 billion yen investment will be Foxconn’s second largest purchase after buying Innolux Corp. of Chi Mei Optoelectronics Corp in 2009. It is expected that Foxconn is looking to expand its offerings beyond assembly and logistics. Sharp is currently one of the largest display manufacturers in the world, and could possibly allow Foxconn to cater to more smartphone and tablet manufacturers.
Sharp is also considering a competing bid from the government-backed Innovation Network Corp. of Japan (INCJ). It is difficult to see which way this will go, but it is very likely that Sharp will be accepting one of these offers very soon.