Foxconn-Sharp acquisition deal postponed: latest Japan reports
By Ted Chen, The China PostTAIPEI, Taiwan -- Foxconn has decided that it will hold off its bid to acquire a 9.9-percent stake of Sharp, ruling out the possibility of the two companies reaching an agreement prior to the deadline of March 26, according to latest reports in Japan.
March 9, 2013, 12:09 am TWN
However, Foxconn was quoted as saying that although delayed, the deal is not off, according to reports.
Since Foxconn's yet-unfruitful bid for Sharp began nearly a year ago, Qualcomm and Samsung have both successfully negotiated their bid for a 5- and 3.3-percent stake of Sharp, respectively, in the interim.
With the addition of two more entities, Foxconn is beginning to feel doubtful of Sharp's proposed four-way collaboration business plan, leading to Foxconn Chairman Terry Gou's decision to halt commitment prior to the March 26 deadline, stating that the four-way relationship adds significant complexity, which the company needs more time to consider, according to commentary.
Despite the uncertainty of Foxconn's bid for Sharp, tangible collaborative results have been yielded between the two companies, following Foxconn's US$800 million investment into Sharp's 10th-generation manufacturing plant in Sakai, Japan last year, representing over half the construction cost of the facility. The plant's utilization rate had surged to 80 percent in an effort to supply panels for Foxconn's launching of its 60-inch TVs, according to reports.
Gou's decision is supported by Sharp's largest backers, which include Mitsubishi UFJ Financial Group, Mizuho Bank, and Resona Bank, which had agreed to jointly provide Sharp a loan of 360 billion yen last September.