Foxconn 'to acquire Sharp for £4 billion'
Deal could be influenced by Apple's iPhone strategy
Foxconn, the Taiwanese firm best known for supplying parts for Apple's mobile and wearable devices, is to acquire ailing Japanese display giant Sharp by the end of the month.
Sharp gave Foxconn preferred negotiating rights after the Sharp board decided to turn its attention away from a rival bid from a fund backed by the Japanese state, according toReuters.
The closing of the acquisition is now a matter of jumping through legal and regulatory hoops.
Foxconn CEO Terry Gou said: "We have a consensus. The rest is process ... [and] I don't see a problem completing this process."
The deal will cost Foxconn 659 billion (3.8 billion), reported Reuters,citing "sources familiar with the matter". If true, this will constitute both the largest acquisition by Foxconn of another firm in its history and also the largest acquisition of a Japanese tech company by a foreign entity.
However, some analysts in the local market have sounded a note of caution over the deal.
Vincent Chen, head of regional research with Yuanta Research in Taipei told Reuters: "The macro environment is not so great. Terry [Gou] is very calculating. He has guts, but I really think there is still a big risk."
Takatochi Itoshima, chief portfolio manager at Commons Asset Management, added: "Foxconn's offer is expensive, which shows how desperately the company wants Sharp's technology."
It is thought that part of the reason Foxconn wants Sharp so badly is because of Apple's increased focus on innovative display technology, as exemplified in the iPhone 6s and iPhone 6s Plus with 3D Touch, Apple Watch with Force Touch, and which is expected to be a major feature of the iPhone 7 as well when it launches in September.
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