Sat, Aug 18, 2012 - Page 14 News List

Sharp offers to sell China, Mexico TV plants: Foxconn


Sharp Corp, Japan’s biggest LCD maker, has offered to sell its TV plants in China and Mexico to Foxconn Technology Group (富士康科技集團), as part of their proposed tie-up, according to the Taiwanese company.

Foxconn is evaluating the proposal, along with a share-purchase plan announced earlier, Simon Hsing (邢治平), a spokesman for Hon Hai Precision Industry Co (鴻海精密), the Taipei-based flagship firm of Foxconn, said by telephone yesterday.

Kyodo News earlier yesterday reported the proposed sale. Miyuki Nakayama, a spokeswoman for Sharp, declined to comment.

Foxconn, which agreed to an equity-alliance with Sharp in March, said on Aug. 3 it plans to renegotiate the price of its investment at ¥550 a share after the Japanese company’s shares plunged following a widening of its annual loss forecast.

Japanese electronics makers, including Sony Corp and Panasonic Corp, are all restructuring businesses after record losses last year because of falling demand for TVs.

“It doesn’t make sense for Foxconn to take on those factories because they would have pressure to fill up those plants and make it worth the money,” said Arthur Liao (廖顯毅), who rates Hon Hai “add” at Fubon Financial Holding Co (富邦金控) in Taipei.

Sharp said on Aug. 10 that it was in talks with Foxconn to make its March agreement “valid.”

The Japanese company’s shares jumped 5.1 percent to ¥184 in Tokyo trading yesterday, 67 percent lower than the March agreement with Foxconn Group. Hon Hai gained 0.5 percent to NT$84.50 in Taipei trading.

Hsing also denied a Nikkei Shimbun report the company was seeking a 20 percent stake in Sharp. All investment options are open, and no specific target has been sought, he said.

Foxconn planned to take a 9.9 percent stake in Sharp through Hon Hai and other group units.

“If they compromise on the stock price, then the cash is not enough to meet Sharp’s needs, so they need to offer more to Foxconn,” Liao said.

Foxconn wants a stake in Sharp to secure access to the latest technology for parts used by its biggest customer, Apple. In offering a lifeline, founder Terry Gou (郭台銘) is betting that Sharp will continue to provide it with key components for the iPads and iPhones that Foxconn assembles, while ensuring one of Apple’s important suppliers survives.

“The amount of money Sharp gets from Foxconn would be less than the agreement in March,” based on the current share price, said Mitsuo Shimizu, a market analyst at Iwai Cosmo Holdings Inc in Tokyo. “It raises a question whether the two companies can get along.”

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