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Reports say Japan's Sharp accepts bid from Hon Hai

Reports say Japan's Sharp accepts bid from Hon Hai

Reports say Japan's Sharp accepts bid from Hon Hai

Japanese media on Thursday reported that the debt-plagued Japanese display maker Sharp Corp. has agreed to a takeover offer from Taiwanese company Hon Hai Precision Industry Co., better known as Foxconn, after a four-year wooing since 2012.

Struggling with chronic losses, the board of century-old Sharp has reportedly opted for Hon Hai to stay whole but under a foreign parent despite Innovation Network Corporation of Japan's (INCJ) plan to restructure by spinning off businesses.

A successful deal would mean Hon Hai, the main assembler of Apple Inc.’s iPhone, is about to take over one of the largest suppliers of screens designed for high-end phones and tablets. The analysts indicated that Sharp owns key patents and techniques on displays. Among them, low temperature poly silicon (LTPS) LCD is the most valuable one for Hon Hai as its main client Apple Inc. purchases over 50 percent of global LTPS screens mainly produced by Japan's Sharp, JDI, and Korea's LG.

Hon Hai Chairman Terry Gou is seeking to add the manufacture of key electronics components and devices to his firm’s core business of assembling products for Apple and other global brands such as Sony.

Sharp would not immediately confirm the reports Thursday by Kyodo News Service and other media that it had opted for Foxconn rather than a competing consortium of Japanese investors to help restructure its once booming liquid crystal display panel business to deal with competition from Korean and Chinese rivals.

The media reported that the value of the deal reaches 700 billion yen. The funding from Hon Hai is set to mainly buy back the preferred stocks owned by Japanese banks.

Earlier this month Sharp was rumored to narrow the choice of a new major shareholder to Hon Hai or INCJ after a bid from South Korea tech conglomerate Samsung to acquire Sharp. Samsung bought a stake in Sharp for $111 million back in 2013 and the company has been eyeing Sharp's Sakai factory, which is one of the few valuable factories that can produce high-quality large TV panels.