Foxconn boss seeks Sharp majority
- By Wu Jin
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E-mail China.org.cn, February 1, 2016
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Terry Gou Tai-ming, owner of Hon Hai Precision Industry Co. Ltd. [Xinhua] |
Taiwan tycoon Terry Gou Tai-ming, owner of Hon Hai Precision Industry Co. Ltd. (trading as Foxconn Technology Group), has been in talks to acquire a major stake in Sharp Corporation, the Japanese home appliance manufacturer, for 659 billion yen (US$5.43billion).
To show his determination to gain a stake in the Japanese company, Gou added 159 billion yen to his previous bidding price; however, the negotiations are still underway.
Instead of seeking to dominate Sharp's operations, Hon Hai is more interested to obtain certain opportunities for sharing its resources, said Li Yaqin, deputy general manager of Sigmaintell Consulting Co Ltd, in a recent interview with China Business News.
Li said the Japanese government will have a predominant role in restructuring the indigenous manufacturer. Meanwhile, the Innovation Network Corporation of Japan (INCJ), a public-private partnership between the Japanese government and 19 major corporations, will be more likely to take charge of Sharp's management as the former is unwilling to see the outflow of technological resources and hopes to rely on corporate restructuring to renew existing technological resources.
Sharp, a home appliance manufacturer for at least a century, fell into a financial crisis in 2011 when it suffered a record 290-billion-yen loss in fiscal revenue.
On March 21, 2012, Gou headed to Japan for a negotiation with the top decision makers of Sharp. However Hon Hai's uncompromising stance appeared to have cost it a chance to take over the company, China Business News reported.
According to Japanese media, Sharp was in contact both with INCJ and Hon Hai in hope of restructuring the company by selling shares or introducing investments. However, worried about the leak of sensitive technology if Sharp was bought by a foreign investor, the Japanese government hopes INCJ will become the major player in the company's restructuring.
It is rather an affair of state than a financial deal, Li said, as the Japanese government is unwilling to see the overseas transfer of Sharp's Liquid Crystal Display (LCD) technology.
When competing with the indigenous force represented by INCJ, Gou provided a generous offer by allotting 389 billion yen to buy Sharp's newly-issued shares and 225 billion yen for its preferred stock, which accounts for two-thirds of Sharp's shares, and 45 billion yen to purchase its facilities, China Business News reported.
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