Foxconn, the Taiwanese company that builds the majority of Apple's iPhones, has offered about $5.1 billion to purchase Japanese electronics maker Sharp Corp., according to a report from Bloomberg. Though not approved, if accepted and completed, this acquisition would be Foxconn's largest acquisition since its purchase of Chi Mei Optoelectronics Corp. in 2009.
The current bid leaves Sharp, which has seen more than 1.1. trillion yen in losses over the past four fiscal years, to weigh Foxconn's offer against a competing one of about $2.6 billion from Innovation Network Corp., a Japanese-based investment fund with government backing.
While the decision over which offer should be considered appears to be a non-issue at first glance, the entire situation has been complicated by the Japanese government, reported MarketWatch. Officials have expressed an unwillingness to cede control of Sharp to a foreign company, noting the company's technology in display panels. Despite offering less, Innovation Network already owns a controlling stake in Japan Display Inc., another major display maker. Officials say the pair share know-how in next-generation panel technology and mass production and don't want to give up either to a competing country.
"Japan's technology is leading the rest of the world, and we would like to help make it even more competitive," industry minister Motoo Hayashi said this week.
Foxconn's willingness to shoulder all of its debt could be the deciding factor in whether Sharp's creditors to base their decision on the economics of the deal rather than political considerations.
This isn't the first time Foxconn has offered to take over the ailing Japanese company, reported Ars Technica. In 2012, Foxconn made a $806 million offer for a 10 percent stake in Sharp, which fell apart after the two failed to agree on management control. This was followed by Foxconn founder Terry Gou purchasing a minority stake in a Sharp subsidiary for $617. Lastly, talks were rumored to have revived in the past year as Sharp approached the deadline for another round of debt payments.
News of the potential deal caused Sharp's shares to rise as much as 25 percent in Tokyo, closing 6 percent higher at the end of trading Thursday. This was a far cry from the past two years when the company's stock dropped 53 percent in 2015 and 20 percent the year before that.
