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Business

Hon Hai chief in final push to close Sharp deal

OSAKA -- Hon Hai Precision Industry Chairman Terry Gou is in Japan holding late-stage talks on a deal to buy embattled electronics giant Sharp, with both sides seeking to conclude by Monday.

     He is negotiating with President Kozo Takahashi. If the deal is reached, which could be later than Monday, the two companies will make the announcement in a press conference, .

     Sharp's board voted to approved a purchase by Hon Hai, or Foxconn, on Feb. 25. But the Taiwanese conglomerate decided on the same day to hold off on the final handshake to review a list of contingent liabilities submitted by Sharp on Feb. 24.

     Foxconn dispatched a team to Sharp's headquarters, plants and other places as part of a new round of due diligence. But the company has apparently concluded that the contingent liabilities, which could be incurred in the future, do not pose a serious threat. The analysis is expected to wrap up soon.

     The bailout by Foxconn comes to around 660 billion yen ($5.75 billion). According to Sharp, 489 billion yen of that would be spent on Sharp shares, including those without voting rights, giving Foxconn a roughly two-thirds stake. The Taiwanese company would likely pick more than half of Sharp's directors.

     Sharp will embark on full-fledged restructuring under Foxconn's umbrella. Newly procured funds would be channeled into organic light-emitting diode smartphone panels and other promising fields. Excluding the underperforming solar cell business, the plan involves consolidating the management of core operations, such as home appliances and copy machines, to boost profitability.

(Nikkei)     

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