Business News

Foxconn Pauses Its Proposed $6.2 Billion Acquisition of Sharp over Financial Future Concerns

Despite Sharp’s confirmation, Foxconn has not signed an agreement and has put the deal on hold because it harbors concerns over Sharp’s financial future.

As reported by Jon Russell of TechCrunch, Foxconn’s proposed acquisition of Sharp has hit a snag, just hours after Japan-based Sharp announced that it had agreed to the buyout, which is estimated at around $6.2 billion.

The Wall Street Journal reports that, despite Sharp’s confirmation, Foxconn has not signed an agreement and has put the deal on hold because it harbors concerns over Sharp’s financial future. The Journal cites sources who claim that Foxconn is evaluating a 100-point list in the hopes that it can revive the deal.

“We already notified Sharp on the same day [before Sharp held its board meeting on Thursday] that our side had to clarify the contents,” the company told the Journal in a statement. “We have to postpone the signing before both sides can reach an agreement. We hope to clarify it quickly and to bring this deal to a successful conclusion.”

The glitch is an embarrassment for Sharp, which had confirmed a deal - approved unanimously by its board - just hours earlier.

The deal, if completed, would be the largest acquisition of a Japanese company from an overseas purchaser. Sharp disclosed that it actually reject a Japan-based bid from state-backed Innovation Network Corp, which had proposed splitting Sharp and its display business, and integrating the latter into Japan Display, an LCD joint venture between Sony, Toshiba, and Hitachi.

Sharp disclosed that Foxconn had agreed in invest in multiple areas of its business, including its OLED screen segment. Sharp said its plans to increase its production of OLED screens, which are increasingly replacing LEDs thanks to better performance, to 90 million 5.5-inch screens per year by 2019. That output volume is estimated to worth around 260 billion yen, or $2.3 billion. Sharp said it will also create products around the Internet of things, and in particular cloud-based services for its consumer products, and develop new camera modules for smartphones and cars.

Sharp has been in various stages of financial trouble over the past few years, but the company still has a visible consumer electronics business - most notable in TVs - and it supplies a range of components for leading tech companies . The latter part is where Foxconn’s interest almost certainly lies, particularly since Sharp is a top producer of display panels, which happens to be one area where Foxconn (also known as Hon Hai Precision) outsources parts from third-parties.

Potentially bringing its own parts to the table, should it acquire Sharp, could be beneficial to Foxconn on a number of levels. First, it’s cheaper to source your own parts than pay market rate to third parties who currently supply them.

Also, the arrangement could favor Apple - Foxconn’s most important client - because Foxconn’s panels currently come from companies like Samsung and LG, which sell components and run consumer businesses that directly rival Apple’s smartphones and tablets. Thus using display panels from Foxconn-owned Sharp increases Foxconn’s (already significant) margins on each Apple device sold, and helps keep Apple’s money away from its competitors.

Beyond that, Foxconn has also branched out into electronics under its own brand, including TVs which retail in 7-Eleven stores in its native Taiwan. Clearly there are synergies here with Sharp in the TV business, and potential other consumer segments like smartphones.

A closed deal would end years of Foxconn flashing admiring glances at Sharp. Four years ago, it came close to securing a 10 percent investment in the Japanese firm, only for the deal to fall through, while Foxconn CEO Terry Gou made a $617 million (personal) investment in a Sharp subsidiary in 2012 in an effort to move potential collaborations forward.

Source: TechCrunch

Image: Japan Times

Related: Foxconn Offers $5.3 Billion to Take Over Sharp


Article Topics
News   Business   Mergers & Acquisitions   Other   Foxconn   All topics


Comments
Be the first to post a comment.
You must be logged in to post a comment. Login.

 
Latest Business News
Walmart’s Ecommerce Growth Declines - Shares Tumble
Walmart is getting bruised in its battle with online leader Amazon, and the world's largest retailer yesterday reported a smaller-than-expected fourth-quarter profit as it wrestled with slower ecommerce…

Walmart in Talks to Buy More Than 40 Percent of Indian Ecommerce Company Flipkart
In what would be one of its biggest overseas deals, the U.S. retailer is looking at buying new and existing shares in Flipkart, a direct challenge to Amazon in Asia’s third-largest economy.

Valentine’s Day and the Tainted Jewelry Supply Chains
Promising practices show potential for change, but jewelry and watch companies still need to do more to ensure that their supply chains are free of human rights abuse.

The Future Belongs to Organizations with Intelligent Operations
According to new research from HfS and Accenture intelligent operations is key to keeping pace with customer expectations and driving superior business outcomes, the move to intelligent operations is fast…


 

24|7 Pro Team

The 24|7 Team is your direct pipeline to solutions for your business challenges. It's your opportunity to have supply chain and logistics experts look at your specific challenges and needs, and give you free, no-obligation advice, solutions, and information.

The 24|7 Team will simplify the task of creating a database of likely partners, building your knowledge base, and preparing your Request for Proposal list.

1
  Choose a topic for your RFP

Transportation RFP/RFI

The Transportation RFP is your direct pipeline to solutions for your transportation challenges. It's your opportunity to have logistics experts look at your specific transportation challenges and needs, and give you free, no-obligation advice, solutions, and information specific to your request.

Choosing the perfect software or system can be an indomitable challenge. Using this transportation/TMS RFP will simplify the task of creating a database of likely partners, building your knowledge base, and preparing your Request for Proposal list.

Warehouse/DC Management RFP/RFI

The Warehouse Management Systems (WMS) RFP is your direct pipeline to solutions for your WMS challenges. It's your opportunity to have logistics experts look at your specific WMS challenges and needs, and give you free, no-obligation advice, solutions, and information specific to your request.

Choosing the perfect WMS solution can be an indomitable challenge. Using this WMS RFP will simplify the task of creating a database of likely partners, building your knowledge base, and preparing your WMS Request for Proposal list.

Supply Chain RFP/RFI

The Supply Chain RFP is your opportunity to have logistics experts look at your specific challenges and needs, and receive free, no-obligation advice, solutions, and information. It simplifies finding a pool of likely partners, building your knowledge base, and preparing your Request for Proposal list. The companies in the Logistics Planner have agreed to respond to your request for in-depth information and follow-up, and your request is totally confidential.

Software/Technology RFP/RFI

The Software/Technology is your direct pipeline to solutions for your logistics information technology challenges. It's your opportunity to have logistics experts look at your specific technology challenges and needs, and give you free, no-obligation advice, solutions, and information specific to your request. Whether it's WMS, TMS, Mobile or Cloud, our pros can help.

The companies listed below have agreed to respond to your request for in-depth information and follow-up. Your request is totally confidential.

Executive Education RFI

The Logistics and Supply Chain Education RFI can help you identify the schools, coursework, continuing education, distance learning and certification opportunities available from leading logistics educational institutions.

Upgrade and improve your logistics and supply chain skillsets. Whatever route you choose—advanced degree, executive education, certification or distance learning—the time and money you invest in your education today can pay off in continued career success tomorrow. Contact leading universities and professional institutions for the information you need to prepare for the future.

Third Party Logistics RFP/RFI

This 3PL Request for Proposal (RFP)/Request for Information (RFI) can help you find the 3PL and 4PL providers that can meet your specific 3PL service challenges and needs. The 3PL companies below will provide free, no-obligation third-party logistics advice, solutions, and information.

Ask your 3PL questions, you'll get answers. Simply complete the information, and detail your 3PL challenges. Then, check off the third-party logistics companies that you want to review your request.

1. Choose an RFI topic.
2. Enter your contact information and challenge.
3. Select companies and optional categories.
4. Submit.


2

Your Information



Your Challenge, Problem or Request *

3

Select Transportation Companies

  • Select All

  • 3Gtms
  • BluJay Solutions
  • CSX Trans. Intermodal
  • Kuebix
  • Landstar
  • Legacy Supply Chain Svs.
  • One Network
  • Pitt Ohio
  • Purolator
  • Quintiq
  • SEKO Logistics
  • SMC3


Select Relevent Categories

  • Air Freight
  • Intermodal
  • Motor Freight
  • Ocean Freight
  • Rail Freight
  • TMS

Select Warehouse/DC Management Companies

  • Select All

  • 3PL Central
  • Apex Supply Chain Tech.
  • Honeywell Intelligrated
  • Kuebix
  • Legacy Supply Chain Svs.
  • Swisslog
  • Westfalia Technologies
  • Zebra Technologies


Select Relevent Categories

  • Auto ID & Data Capture
  • Automation
  • Conveyors & Sortation
  • Lift Trucks
  • Packaging & Labeling
  • Pallets & Containers
  • Shelving & Racking
  • WMS

Select Supply Chain Companies

  • Select All

  • 3Gtms
  • 3PL Central
  • Amber Road
  • Apex Supply Chain Tech.
  • APICS
  • BluJay Solutions
  • CSX Trans. Intermodal
  • Frontier Business
  • Kuebix
  • Legacy Supply Chain Svs.
  • Logility
  • One Network
  • Purolator
  • Quintiq
  • SMC3
  • Synchrono
  • TAKE Supply Chain
  • Westfalia Technologies
  • Zebra Technologies


Select Relevent Categories

  • Global Trade
  • Inventory Management
  • Risk Management
  • Sustainability

Select Software/Technology Companies

  • Select All

  • 3GTMS
  • 3PL Central
  • Apex Supply Chain Tech.
  • BluJay Solutions
  • Honeywell Intelligrated
  • Frontier Business
  • Kuebix
  • Logility
  • One Network
  • Quintiq
  • SMC3
  • Swisslog Logistics
  • Synchrono
  • TAKE Supply Chain
  • Zebra Technologies


Select Relevent Categories

  • ERP
  • Sales & Operations
  • Sourcing/Procurement
  • Optimization
  • Transportation Mgmt
  • Warehouse Mgmt

Select Executive Education Choices

  • Select All

  • Graduate Courses
  • Online/Distance
  • Executive Education
  • Certifications
  • Undergraduate
  • Seminars
  • Associations
  • Conferences
  • Tradeshows


Select Third Party Logistics Companies

  • Select All

  • 3PL Central
  • Landstar
  • Legacy Supply Chain Svs.
  • Purolator
  • SEKO Logistics
  • Westfalia Technologies


4
 

24|7 Company Profiles