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September 23, 2017

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Gou reportedly departs Japan sans Sharp deal

Hon Hai Precision Industry's chairman left Japan on Thursday without finalizing a deal for a stake in Sharp Corp., Jiji news reported, prolonging uncertainty over an alliance that could rescue the loss-burdened Japanese display and TV maker.

Hon Hai Chairman and founder Terry Gou had earlier visited Sharp's flagship LCD panel factory in western Japan, the world's most advanced and 38-percent owned by Hon Hai. Another Hon Hai executive said the two companies may spend over US$1 billion to boost capacity at the Sakai plant, near Osaka.

The firms will also use Hon Hai's procurement muscle to help Sharp cut costs, C.C. Lin, Hon Hai's most senior official in charge of the Sakai plant, said after Gou's visit.

Gou, seeking to further tap Sharp's expertise to make more display panels for Apple Inc.'s iPhones and consumer electronics, is discussing a deal that would make Hon Hai the biggest shareholder of Sharp with at least a 9.9-percent stake.

He has said he wanted to conclude a deal as soon as possible and his visit fuelled expectations that an announcement could have been made as early as Friday.

Gou's spokesman in Taipei, Simon Hsing, said he could not immediately confirm the whereabouts of the elusive Taiwanese executive, who earlier in the day failed to show up at a scheduled media briefing at the Sakai plant, where more than 100 journalists had assembled.

Hon Hai is also considering buying Sharp's TV assembly plants in China and Mexico, and may list the Sakai plant on Taiwan's stock exchange in two or three years, Lin said.

Gou has said that whether he takes a stake in Sharp will depend on the Japanese firm's willingness to heed his advice on how to restore profits.

"We can lower a lot of costs at Sharp such as in component procurement. We buy a lot of things," Lin said.

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