Foxconn is finalizing its takeover of consumer products maker Sharp in a $3.5 billion deal that the electronics parts maker has been pursuing for several years.
The deal, which will help Foxconn expand into the display production market, will be signed on April 2, according to a March 30 story by The Wall Street Journal. The boards of both companies have approved the transaction, which comes at a sale price that is lower than Foxconn's previous $4.4 billion offer in February.
Foxconn "has been looking to expand in the market for next-generation displays with its pursuit of Sharp," which supplies smartphone screens to Apple, the story reported. "Foxconn believes acquiring Sharp will allow it to move up the technology value chain by making smartphone screens, which are the most expensive components in mobile devices."
"We have much that we want to achieve and I am confident that we will unlock Sharp's true potential and together reach great heights," Terry Gou, Foxconn's chairman, said in a statement.
Following the acquisition, Foxconn "plans to invest in Sharp to expand its screen production capacity, including investing in a new type of display technology known as organic light emitting diode, or OLED," the Journal reported. "Apple is expected to use the technology in future iPhones, according to people familiar with the matter. Sharp said it would spend two-thirds of what Foxconn plans to invest in the company to beef up its panel manufacturing technology."
The pending completion of the deal comes just a month after negotiations were held up by last-minute revelations that Sharp's future financial liabilities were greater than Foxconn expected, according to an earlier eWEEK story.
Sharp's board originally had voted to sell itself to Foxconn Technology Group on Feb. 25 after being pursued in a bidding war, but the completion of the deal was halted by the financial details surrounding Sharp. The delay was related to about $3.1 billion worth of potential liabilities that Sharp revealed as the final deal approached.
Foxconn, the largest worldwide assembler of Apple iPhones, has been tussling for Sharp against another buyout offer from the Innovation Network Corp. of Japan (INCJ), a government-backed fund, according to an earlier eWEEK story.
Originally, INCJ appeared to lead in the running for Sharp, but that changed earlier in February when Foxconn began its dogged pursuit of the company.
In August 2015, Chinese smartphone maker Xiaomi began partnering with Foxconn to try to carve out a bigger piece of the huge consumer handset market in India by assembling phones there to cut costs and simplify distribution. The devices will be assembled in a factory in the southern state of Andhra Pradesh, according to an earlier eWEEK story. Xiaomi's first locally made smartphone, the $109 Redmi2 Prime, rolled off the assembly line in India almost immediately after the announcement. Xiaomi entered the market in India in July 2014 and has become the second-largest player for phones in the country. Foxconn previously had assembly plants in India.