Foxconn takesover Sharp

As part of its effort to expand in the market for next-generation displays, Taiwanese electronics assembler Foxconn Technology Group on Wednesday announced takeover plans of the struggling Japanese consumer electronics company Sharp Corporation for about ¥389 billion ($3.5 bn).

Foxconn, also known as Hon Hai Precision Industry, will take 66% of Osaka-based Sharp. The boards of Sharp and Foxconn approved a plan. Even though Sharp proposed not less than $6.2 billion fee one month ago, Foxconn clinched the deal with lesser price, as there was growing concern around the viability of Sharp’s financial performance.

“I am thrilled by the prospects for this strategic alliance, and I look forward to working with everyone at Sharp,” said Foxconn founder Terry Gou in a statement.

“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,” he said.

Sharp, an electronics brand founded in 1912, started making mechanical pencils and became a top company in hand-held and flat-screen electronic devices. Before the arrival of iPhone, the company’s Aquos flat-panel TVs and cellphones made deep inroads in Japan.

Foxconn is one of the biggest players in the global manufacturing outsourcing industry, catering to the demands of Apple, Sony, Blackberry and other brands. Even though its main operations are in Mainland China, with more than 1 million people, it recently announced setting up manufacturing facilities in India with a commitment to invest $5 billion in Maharashtra over five years.

Foxconn's biggest acquisition happened in 2010 when it purchased Chi Mei Optoelectronics for $5.3 billion. The company also acquired Asia Pacific Telecom, SK C&C, Premier Image Technology and Ambit Microsystem.

Sharp, which reported a net loss of $2.3 billion for the year ended March 2015, said it planned to reduce employee count by 10%  across the globe, including 3,500 in Japan alone.

According to a recent data, Sharp India has 550 people on roll with more than 1,000 temporary staff. In India, the company has an annual turnover of Rs 1,150 crore.