Sharp, Fox­conn to sign takeover deal next week

The Pak Banker - - COMPANIES/BOSS -

TOKYO: Sharp Corp. and Tai­wan's Fox­conn are set to sign a takeover deal next week af­ter re­peated de­lays, with the two sides set to agree on a smaller bailout than orig­i­nally planned for the trou­bled Ja­panese elec­tron­ics maker, two peo­ple familiar with the talks said on Satur­day.

The two com­pa­nies will hold board meet­ings on Wed­nes­day to ap­prove the deal and of­fi­cially sign a deal the fol­low­ing day, said the two peo­ple. Both of the peo­ple de­clined to be iden­ti­fied as they are not au­tho­rized to speak to the me­dia. A Sharp spokesman de­clined to com­ment, while Fox­conn of­fi­cials were not im­me­di­ately avail­able for com­ment. Fox­conn, for­mally known as Hon Hai Pre­ci­sion In­dus­try Co., is set to cut its ear­lier 489 bil­lion yen ($4.3 bil­lion) of­fer for newly is­sued Sharp shares by about 100 bil­lion yen, the peo­ple cited ear­lier said.

The com­pa­nies had come close to sign­ing a deal last month but Fox­conn hit the pause but­ton fol­low­ing rev­e­la­tions of pre­vi­ously undis­closed li­a­bil­i­ties at the Ja­panese com­pany. The deal would be the largest ac­qui­si­tion by a for­eign com­pany in Ja­pan's in­su­lar tech­nol­ogy sec­tor. In choos­ing to ne­go­ti­ate with Fox­conn, Sharp turned down a ri­val of­fer by a state­backed fund. It would also boost Fox­conn's po­si­tion as Ap­ple's main con­tract man­u­fac­turer and pro­vide Sharp with funds to start mass-pro­duc­ing or­ganic light-emit­ting diode ( OLED) screens by 2018, around the time Ap­ple is ex­pected to adopt the next-gen­er­a­tion dis­plays for its iPhones.

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