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Lawrence Chung

Taiwanese electronics manufacturer Foxconn yesterday signed a 388.8 billion yen (HK$27 billion) agreement to take over Sharp Corp in the first foreign acquisition of a major Japanese technology company.
More than 500 journalists packed the venue in Osaka, Japan, where the agreement was signed with Taiwan’s flag placed next to Japan’s at the ceremony.
The display of Taiwan’s flag at such a high-profile occasion is rare in Japan due to its long-held stance of not recognising the island as a sovereign state. Beijing considers Taiwan a renegade province that has split from the rest of China.
The size of the deal and the prominence given to its flag was proudly trumpeted by Taiwan’s media.
“It is the biggest news in Taiwan and Japan today, and both ‘national flags’ have also been sharply displayed,” the China Times and the official Central News Agency reported.
The deal, negotiated on and off for four years, officially ended Sharp’s century of independence.
It also paves the way for more large foreign acquisition of Japanese enterprises, according to traders and analysts.
“Japan used to be highly cautious over the foreign acquisition of its financially strapped businesses,” said Taipei-based fund manager Michael Wang.
“[The] takeover may indicate that the strategy of having other big Japanese businesses saving the financially crippled ones might be reconsidered.”
Terry Gou, chairman of Foxconn, signed the agreement with Sharp’s president, Kozo Takahashi.
It allows the Taiwanese firm to obtain a 66 per cent stake in the Japanese electronics maker.
Foxconn, also known as Hon Hai Precision Industry, is best known as a contract manufacturer for Apple.
The price for the stake in Sharp was 100 billion yen lower than the one agreed in February, according to media reports in Taiwan and Japan.
“I have deep respect for Sharp’s 105-year history, its technological innovation and leadership,” Gou was quoted as saying at a press conference by Bloomberg.
Takahashi said his company faced an increasingly difficult business environment amid intense competition.
“This agreement will not only contribute to the expansion of our business, but will also improve our financial standing, creating vast synergies for both companies,” he was quoted as saying.
The Taiwanese firm will benefit from Sharp’s LCD screen display business.
It has shifted production away from large screens to smaller ones used in high-end smartphones and tablet devices.
Analysts said the deal was a coup for Gou, who reportedly flew his mother, wife and daughter to the signing ceremony in Osaka in his private jet.


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Foxconn signs takeover deal for Japanese electronics firm Sharp

Kozo Takahashi, president of Sharp Corp, walks past a podium after speaking following a takeover agreement with Taiwan's Hon Hai Technology Group in Osaka. Photo: EPA

Foxconn signs takeover deal for Japanese electronics firm Sharp

Deal first foreign acquisition of major Japanese technology firm