Foxconn buys Sharp for $3.5 billion
The boards from both companies approved the buyout on Wednesday, according to the Wall Street Journal. Foxconn will own 66 percent of Sharp once the deal is complete, and that can grow to 72 percent starting in July 2017 when Foxconn starts converting the preferred shares it will own into common shares.
Foxconn also gets to choose up to two thirds of Sharp's board of directors once the deal is wrapped up.
Word that Foxconn wanted to buy Sharp, and that Sharp was looking for a buyer, surfaced in January. At the time, Foxconn was bidding $5.3 billion and word was Innovation Corporation of Japan was bidding $2.6 billion on the company.
By early February Sharp said it was accepting Foxconn's deal, but by the end of the month it looked like the buyout could fall through because of unexpected liabilities that surfaced. It looks like those issues were resolved because the deal is definitely on.
Sharp has been struggling over the past few years and received big cash infusions from Japan's government more than once to keep afloat. The company is well known for its electronics, and has been a display supplier for Apple.
Foxconn is a long time Apple manufacturing partner, and the Sharp buyout puts it in a position where it can be a parts supplier, too. The deal could also lead to Foxconn-branded electronics hitting store shelves at some point, too.
The deal is interesting in that Japan has historically been adverse to foreign companies investing in local businesses. Foxconn is based in Taiwan, putting it decidedly outside of Japan's borders.
The deal will be formally signed on Saturday, April 2. Sharp shareholders get to vote on the deal in June, after which the buyout will be officially completed.
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