Foxconn Group says taking control of Sharp in reduced buyout

TOKYO (BLOOMBERG) - Foxconn Technology Group Chairman Terry Gou finally clinched a deal to buy Sharp Corp. after years of pursuit, bringing together the main assembler of Apple Inc.'s iPhones with the electronics maker that built Japan's first television sets.

The parent of Hon Hai Precision Industry Co. and its affiliated companies are taking a 66 per cent stake in Sharp, according to a statement issued Wednesday. Foxconn is paying 88 yen (S$1.05) per common share for Sharp, after the maker of Aquos TVs posted record losses and its stock tanked over the past four years.

The deal's consummation caps weeks of drama, when the acquisition repeatedly looked like it could fall apart. Mr Gou had appeared on the verge of grasping his prize a month ago, when Sharp's board chose Foxconn over a rival bid from the state- backed Innovation Network Corp. of Japan. But after learning about liabilities at Sharp, Mr Gou pushed back the final agreement until this week to negotiate a lower price.

Mr Gou is seeking to broaden Foxconn's remit, transforming the contract manufacturer into a company that will not only make key components and assemble devices, but also sell electronics products to consumers. The billionaire's pursuit of Sharp stretches back to 2012, when he offered to buy shares at 550 yen apiece in a deal that was never completed.

Sharp's stock rose 3.9 per cent to 135 yen at the close in Tokyo before the announcement.

The sale of an iconic Japanese brand to the Taiwanese company is rare in a country where struggling companies have long been able to rely on the government and banks for support. Up until a month ago, the government buyout fund was in contention to acquire Sharp, which was saddled with debt and struggling with chronic losses. Sharp deemed at the time that the offer from Foxconn was superior.