Tue, Sep 22, 2015 - Page 13 News List

Foxconn asks Apple to help buy Sharp’s LCD unit: ‘Nikkei’

AFP, TOKYO

Taiwanese electronics giant Foxconn Technology Group (富士康) has proposed taking over troubled Japanese behemoth Sharp’s display business, the Nikkei business daily reported yesterday, and has urged Apple Inc to join the deal.

Under the new proposal, Foxconn — an Apple supplier — would take a majority stake in Sharp’s LCD company, the Nikkei said.

The company has also urged Apple to make an investment as part of the proposed deal, according to the report.

The Nikkei did not clarify details of the proposal or the extent of Apple’s possible involvement, but it said Sharp’s major lenders had estimated the firm’s LCD operations to be worth about ¥300 billion (US$2.5 billion) earlier this year.

The fall in prices of small to medium-sized displays for smartphones could depress the price tag if negotiations drag on for a long time, the Nikkei added.

Foxconn — which is the trading name for Hon Hai Precision Industry Co (鴻海精密) — has also expressed its desire to purchase Sharp’s 38 percent stake in a major display factory that the two firms jointly operate in Sakai, western Japan, the Nikkei said.

The proposals would give Sharp “an opportunity to offload operations carrying a heavy downside risk,” while letting it stay involved in the business and avoid massive layoffs, the report said.

Embattled Sharp — also an Apple supplier, and a leader in screens for smartphones and tablets — has failed to move past years of gaping deficits, partly caused by steep losses in its television unit, which has been hammered by competition from lower-cost rivals, particularly in South Korea and Taiwan.

The maker of the Aquos brand has been selling assets and going through painful restructuring to wipe away huge losses.

Earlier this year, Sharp said it was cutting 10 percent of its 49,000 jobs worldwide as part of a turnaround plan.

The reported proposal came amid speculation that Sharp is in tie-up talks with public-private Innovation Network Corp of Japan, which is the main shareholder in rival Japan Display, the Nikkei said.

Some Sharp insiders favor the Japanese fund in order to keep the electronics maker’s technology away from non-Japanese businesses, the report said.

However, Apple might support the Foxconn proposal to prevent a merger between the two Japanese display firms, which would reduce the US company’s supplier options and make controlling costs more difficult, the report said.

Hon Hai declined to comment on the report, saying that it does not comment on market speculation.

Additional reporting by CNA

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