TAIPEI – Foxconn Technology Group has offered about ¥600 billion to buy struggling electronics maker Sharp Corp., according to a person familiar with the talks, in what could mark the largest acquisition since 2009 for the assembler of Apple Inc.’s iPhones.
A decision to accept or reject the bid is expected before the end of January, the source said, asking not to be identified as the discussions are private.
However, Sharp is leaning toward accepting a rescue bid by the government-backed Innovation Network Corp. of Japan despite its reportedly lower offer, according to two people familiar with the talks. A deal with INCJ would allow Sharp to keep its technology within Japan and cooperate more closely with domestic companies, said the people, who asked not to be named because the matter is private.
Chu Wen-min, a spokesman for Foxconn’s Hon Hai Precision Industry Co., declined to comment Thursday.
In 2012, Foxconn offered ¥66.9 billion for a 9.88 percent stake in the supplier of electronics and components. Those discussions foundered after both sides failed to agree on management control, but they were said to have been revived in the past year after Sharp turned to INCJ for possible funding as a new round of debt payments approaches.
Foxconn is interested in expanding its business beyond the assembly of products and logistics by adding a wider array of components to its offerings. Sharp, one of the world’s largest makers of displays for smartphones and tablets, could gain more business from Apple and other Foxconn customers like Amazon.com Inc. and Xiaomi Corp.
“There need to be core products around which Sharp can build a market position. What those will be isn’t clear, regardless of which side they join,” said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management Co. in Tokyo. “Outside of short-term speculators, most investors will stay away from Sharp’s shares until the final details are settled.”
The Japanese company’s shares surged as much as 25 percent in Tokyo. They closed 6 percent higher on Thursday, taking the firm’s market value to about ¥218 billion. The stock dropped 53 percent last year and 20 percent in 2014.
Sharp is considering a $5.3 billion offer from Foxconn and a competing bid from INCJ, the Wall Street Journal reported earlier, citing unidentified people familiar with the matter.
Sharp had a total debt of ¥791.8 billion as of Sept. 30, data show. The Osaka-based company has booked more than ¥1.1 trillion in losses over the past four fiscal years..