Lutnick to Lead Commerce, a Final Biden-Xi Meeting, and USCC Supports PNTR Repeal
Foxconn Technology Group and Sharp Corporation signed a deal on April 2 for the Taiwan-based electronic contract manufacturer to acquire the Japanese consumer electronics firm for $3.5 billion. The final deal, approved on March 30, is nearly $2.5 billion less than what was originally agreed upon, ending months of negotiations marred by setbacks and disagreements.
The original deal was quickly restructured after it was discovered that Sharp failed to disclose potential financial liabilities including tax claims, infringement cases, and potential lawsuits in excess of $3.14 billion. Although the deal was close to breaking down, Foxconn Chairman Terry Gao delayed the deadline for a final agreement to negotiate a lower buying price and salvage it.
The deal also includes agreements by both companies’ main lenders, Mizuho Bank and Bank of Tokyo-Mitsubishi UFJ, to establish a credit line for Sharp worth $2.7 billion.
This deal is a victory for Foxconn, and a new chapter for Sharp after battling heavy debt for years and almost going bankrupt.
Foxconn has been seeking opportunities to climb the technology value chain by moving from low-margin assembly work to selling electronic components to companies. Foxconn believes that investing in Sharp will allow it to develop Sharp’s advanced liquid display technology and other nex-gen technology, gaining pricing leverage deals with major clients like Apple, Microsoft, Amazon, and Sony.