Tablets By Matthew Humphries Jan. 21, 2016 9:30 am
The name Sharp is known worldwide as an electronics brand, and the multinational corporation makes everything from LCD panels, mobile phones, flash memory, and audio-visual equipment to microwaves, air conditioners, cash registers, and solar panels. Yet, the company has struggled in recent years, approaching its banking partners multiple times for help. As it currently stands, Sharp’s debt is thought to total around 600 billion yen ($5.13 billion).
Taiwanese company Foxconn is willing to acquire Sharp, and is thought to have offered 625 billion yen ($5.3 billion) for the corporation as well as taking on its debts. However, there is a major concern from Japan’s government because the sale would see a Japanese company under foreign control.
There is another offer on the table from Innovation Network Corp. of Japan. That is a government backed investment fund, so much more agreeable, however, it isn’t offering anywhere near the money (300 billion yen) Foxconn has put on the table, which will be very tempting to all of Sharp’s investors.
To help make the acquisition more easily digestible, Foxconn has stated it will not replace Sharp’s upper management if the deal happens, meaning it will effectively remain a company run by the Japanese, just not owned by them anymore.
As to why Foxconn wants Sharp, there are two main reasons. The first is Sharp’s expertise in display design and manufacturing, which Foxconn could take full advantage of for smartphone and tablet production. The second reason is the more interesting one. Sharp as a brand is strong, and it's long been rumored Foxconn would like to sell its own branded products. If that brand turned out to be Sharp, they would certainly hit the ground running.
A decision on whether Sharp will be sold and who will be buying is expected to be made on February 4th, the same day as the corporation announces its quarterly results.