Sharp and Foxconn have yet to reach billion dollar investment deal

By , Aug 30, 2012

Earlier this month, word got out that Hon Hai (aka Foxconn) was looking to up its stake in Sharp Corporation to 10 percent, or more, giving it a fairly large piece of the Japanese company.

The news fueled rumors of an Apple TV set, as Foxconn is Apple’s favorite manufacturer and Sharp, well, makes TVs. But according to a new report, the two sides have yet to reach a deal…

Reuters reports:

“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.”

Foxconn agreed to pay around a billion dollars for a 9.9% stake in Sharp back in March, but reopened the negotiations earlier this month in hopes of lowering the price, on the heels of Sharp’s stock drop.

Costs aside, the investment deal would greatly benefit both companies. For example, Foxconn would be able to trim component prices for Sharp and help it get out of the negative column. And Sharp could help streamline Foxconn’s iPhone and iPad production with its display expertise.

Foxconn’s chairman, Terry Gou, says that whether or not Foxconn takes a major stake in Sharp is up to them. He says that they must be willing to heed to his advice on how to restore profits.

The potential impact of this whole thing is staggering, as it could lead to lower manufacturing and component costs, and in the end, lower product prices. We’ll be keeping an eye on this for sure.

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