Taiwan's Foxconn agrees to acquire Sharp Corp at a big discount to its original offer after a month of wrangling that raised doubts over whether the two companies could work well together and compete with rivals in smartphone displays. Eve Johnson reports.
Foxconn's takeover of Japanese electronics giant Sharp is finally happening The Taiwanese company announcing the deal Wednesday. It had dangled a 4.3 billion dollar offer for a two-thirds stake in Sharp in February. But after weeks of negotiations, it's slashed that 3.5 billion. Media report it's also planning to overhaul Sharp's management team and replace it's CEO. (SOUNDBITE) (English) REUTERS TOKYO BUREAU CHIEF, BILLY MALLARD, SAYING: "It's the first time that a foreign company has taken over a major tech firm in Japan. For Sharp that means it's a lifeline, it's survival. This is the third bailout that this company has gotten in about 3 and a half years. The banks tried to rescue them twice but they had invested heavily in LCDs and they were getting their lunch eaten by other Asian competitors. For Foxconn, it gives them technology. Foxconn is the main Apple supplier, the biggest Apple supplier. It gives them technology to go up against their rival Samsung." Sharp had earlier been weighing a bailout from a state-backed fund. ...and people assumed the company would stick with the local offer. (SOUNDBITE) (English) REUTERS TOKYO BUREAU CHIEF, BILLY MALLARD, SAYING: "Then a funny thing happened - capitalism. This Taiwanese company led by a flamboyant chairman, Terry Guo, comes in with a better offer, a much better offer than what the state fund, called INCJ had in mind." The Sharp board ended up voting unanimously for the offer. But the month of tense negotiations that followed has raised questions about just how well the rising Taiwanese star and the stumbling Japanese giant are going to get along.