Sharp, which has been going through a financial slump for quite some time now made an agreement with leading device assembling company Foxconn. The takeover would end up boosting Foxconn’s position in the tech industry and would end up making it Apple’s biggest supplier. However, Foxconn later said it would delay the signing. Here’s what happened that led to the deal getting scuttled in the final moments.
Foxconn says Sharp made some changes to the Agreement
According to Foxconn, on Wednesday Sharp had couriered over a new key document to the management of the former. Foxconn mentioned that it responded to Sharp on the same day that the content needed to be clarified before a deal could be signed. The company has also stated that it is hoping to clear up the matter as soon as possible. After the agreement has been given the green light once more, Foxconn will acquire two-thirds of Sharp, which would issue around $4.4 billion worth of new shares to the company Foxconn. In addition, Foxconn’s total investment is set to be more than 650 billion yen (or $5.8 billion) in Sharp.
If the agreement gets the green light once more, Foxconn will acquire two-thirds of Sharp, which would issue around $4.4 billion worth of new shares to the company Foxconn. In addition, Foxconn’s total investment is set to be more than 650 billion yen (or $5.8 billion) in Sharp.
What is expected to happen after the deal has successfully been closed?
The agreement will see a stream of mass production towards organic light-emitting diode (OLED) screens by 2018, which are expected to be present inside Apple’s next-generation iPhone lineup. Foxconn founder Terry Gou sees the takeover as Sharp being able to take the fight to gigantic manufacturers like Samsung. In addition, Gavin Parry, managing director of Parry International Trading, a brokers firm situated in Hong Kong, has shared positive remarks towards Sharp’s direction:
“Sharp has the technology to build out the components to compete with Samsung as an Apple supplier, which means that with Sharp under its umbrella Foxconn can help Apple wean itself off Samsung. This gives Foxconn better pricing power with Apple.”
Foxconn has declined to comment further on the matter. However, it looks like Foxconn are dead serious about getting their hands on Sharp; it is not every day that you could end up becoming Apple’s biggest supplier.
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