After the two firms reached a consensus on most points, Taiwan's Foxconn is aiming to finalize a deal to acquire Japan's Sharp Corp by the end of the month, Foxconn Chief Executive Officer Terry Gou said.
After meeting with executives of the struggling electronics maker Gou said that most remaining issues to be resolved were legal and regulatory and Foxconn has been given preferred negotiating rights and most remaining issues to be resolved were legal and regulatory. Foxconn is formally known as Hon Hai Precision Industry Co.
Sources familiar with the matter have said that the Apple Inc supplier has offered to invest around 659 billion yen ($5.6 billion) in Sharp. This deal would be the largest acquisition by a foreign company in Japan's insulated tech sector and the biggest deal till date for Foxconn.
"We have a consensus. The rest is a process ... I don't see a problem completing this process," Gou told reporters.
Sharp's board decided to focus on Foxconn's offer over a rival bid from a Japanese state-backed fund just a day earlier and the meeting between the two companies were held after the Sharp decision.
Market experts say that buying Sharp is seen as carrying as many, or more, risks than potential benefits even as many investors have faith in Gou's business acumen. It is under his leadership that Foxconn has come to be the world's biggest contract maker of electronic gadgets from scratch.
At a time when clients such as Apple are likely looking ahead to more advanced flexible screens, the deal would give Foxconn access to the Japanese display maker's cutting-edge technology.
Fierce competition from South Korea and Chinese rivals that have hammered demand for Sharp's liquid crystal displays as well as slowing global sales for smartphones are key concerns for the deal. The above factors have hindered Sharp from making a recovery despite two major bank-led bailouts in the last four years.
The macro environment is not so great. Terry is very calculating. He has guts, but I really think there is still a big risk," said Vincent Chen, head of regional research with Yuanta Research in Taipei.
With the acquisition likely to weigh heavily on its balance sheet many have claimed that Foxconn is overpaying for a loss-making company by buying Sharp.
"Foxconn's offer is expensive, which shows how desperately the company wants Sharp's technology," said Takatoshi Itoshima, chief portfolio manager at Commons Asset Management.
After a 2012 agreement to form a strategic alliance and capital ties broke down, there was still some wariness among Sharp and its creditors toward Gou, Japan-based sources familiar with the matter have also said.
Sharp and Foxconn had since forged a good relationship through the joint management of a plant in Japan, said Sharp CEO Kozo Takahashi on Thursday.
On the news that Gou had flown in to meet Sharp executives, there was a rise in shares of Sharp of 10 percent.
(Source:www.reuters.com)
After meeting with executives of the struggling electronics maker Gou said that most remaining issues to be resolved were legal and regulatory and Foxconn has been given preferred negotiating rights and most remaining issues to be resolved were legal and regulatory. Foxconn is formally known as Hon Hai Precision Industry Co.
Sources familiar with the matter have said that the Apple Inc supplier has offered to invest around 659 billion yen ($5.6 billion) in Sharp. This deal would be the largest acquisition by a foreign company in Japan's insulated tech sector and the biggest deal till date for Foxconn.
"We have a consensus. The rest is a process ... I don't see a problem completing this process," Gou told reporters.
Sharp's board decided to focus on Foxconn's offer over a rival bid from a Japanese state-backed fund just a day earlier and the meeting between the two companies were held after the Sharp decision.
Market experts say that buying Sharp is seen as carrying as many, or more, risks than potential benefits even as many investors have faith in Gou's business acumen. It is under his leadership that Foxconn has come to be the world's biggest contract maker of electronic gadgets from scratch.
At a time when clients such as Apple are likely looking ahead to more advanced flexible screens, the deal would give Foxconn access to the Japanese display maker's cutting-edge technology.
Fierce competition from South Korea and Chinese rivals that have hammered demand for Sharp's liquid crystal displays as well as slowing global sales for smartphones are key concerns for the deal. The above factors have hindered Sharp from making a recovery despite two major bank-led bailouts in the last four years.
The macro environment is not so great. Terry is very calculating. He has guts, but I really think there is still a big risk," said Vincent Chen, head of regional research with Yuanta Research in Taipei.
With the acquisition likely to weigh heavily on its balance sheet many have claimed that Foxconn is overpaying for a loss-making company by buying Sharp.
"Foxconn's offer is expensive, which shows how desperately the company wants Sharp's technology," said Takatoshi Itoshima, chief portfolio manager at Commons Asset Management.
After a 2012 agreement to form a strategic alliance and capital ties broke down, there was still some wariness among Sharp and its creditors toward Gou, Japan-based sources familiar with the matter have also said.
Sharp and Foxconn had since forged a good relationship through the joint management of a plant in Japan, said Sharp CEO Kozo Takahashi on Thursday.
On the news that Gou had flown in to meet Sharp executives, there was a rise in shares of Sharp of 10 percent.
(Source:www.reuters.com)
