Taiwan’s Foxconn has agreed to purchase Sharp Corp at a big discount to its original offer after a month of negotiation that sowed more doubts over whether the two companies can work well together and fend off fierce competition from smartphone display rivals.
Foxconn, formally known as Hon Hai Precision Industry Co, will pay a sum of $3.5 billion (2.43 billion pounds) for a two-thirds stake, nearly $900 million less than its initial offer, the companies said.
The deal, which is the largest acquisition by a foreign company in Japan’s insular tech industry and the end of independence for a 100-year-old company that started out making belt buckles and mechanical pencils.
It would also give Foxconn control of Sharp’s advanced screen technology and help strengthen its pricing power with major client Apple Inc.
Highlighting Sharp’s dire finances, the ailing display maker estimated an operating loss of around 170 billion yen (1 billion pounds) for the year through Thursday in contrast to its earlier profit forecast of 10 billion yen.
Foxconn said it will buy Sharp’s shares at 88 yen per share, a 35 percent discount to their close on Wednesday.