The Wall Street Journal has it on good authority that Foxconn, the world’s biggest contract fabricator that assembles products for Apple and other companies, is buying Sharp, an iPhone display supplier.
Sharp has been in financial crisis for several years and banks have bailed it out twice in three years.
Foxconn has reportedly offered approximately ¥625 billion, or about $5.3 billion, to acquire Sharp. Back in 2013, Foxconn was supposed to buy a large stake in Sharp, but the deal quickly collapsed over share price dispute.
The government is reportedly reluctant to let Sharp come under foreign control. However, Foxconn is said to have offered more money for Sharp than Japan’s government-backed investment fund Innovation Network, which owns a controlling stake in Japan Display, another major display maker.
More importantly, Foxconn has no plans to replace Sharp’s top management and has apparently demonstrated “a willingness to shoulder all of its debt,” a move designed to persuade Sharp’s creditors to make a decision “based on the economics of the deal, rather than political considerations.”
Shares in Sharp jumped more than 20 percent after the report.
Foxconn chairman Terry Gou in 2012 acquired a 38 percent stake in a Sharp display factory in Sakai, Japan, and has paid for it out of his own pocket.
In addition to Sharp, Apple also sources LTPS panels in current iPhones from Japan Display are Korea’s LG Display. A report in March 2015 revealed that Apple invested in a new display plant with Japan Display.
The Cupertino firm is expected to make a major switch from using LTPS panels in iPhones toward adopting way more power-efficient OLED screen technology in the next two to three years.
Source: The Wall Street Journal