Apple Supplier Foxconn to Acquire Sharp for $6.2 Billion [Updated]

Discussion in 'iOS Blog Discussion' started by MacRumors, Feb 24, 2016.

  1. MacRumors macrumors bot


    Apr 12, 2001

    In late January it was reported that Apple supplier Foxconn made a $5.3 billion bid to purchase Japanese electronics maker Sharp. Today, Sharp has decided to accept an updated $6.2 billion takeover offer from Foxconn, reports Nikkei Asian Review.


    Sharp intends to restructure its operations under the umbrella of Foxconn, although arrangements of the purchase have not yet been revealed. Sharp was facing either a buyout offer from Foxconn or support from the Innovation Network Corporation of Japan, a state-backed fund that offered a roughly $2.7 billion injection and a $1.8 billion credit line.

    Currently, Sharp supplies Apple with LCD displays for iPhones in addition to being a leading television maker and selling audio equipment, home appliances and more. The company has fallen on hard times recently, incurring a net loss of nearly $1.9 billion in the fiscal year ending March 2015. It also must repay $4.3 billion it had borrowed by March; Foxconn reportedly was willing to take on the debt.

    It's unclear what Foxconn's plans for Sharp are, but the company could sell Foxconn-made electronics under the Sharp brand. The acquisition's impact on Apple may only be near-term, as Apple is rumored to be turning to Japan Display, LG and Samsung for OLED displays in iPhones as early as 2018.

    Update: Shortly after the its acquisition of Sharp was announced, Foxconn put the deal on hold after "discovering previously undisclosed liabilities." Foxconn said it would not sign off on the deal until terms had been clarified. At issue is hundreds of billions of yen in liabilities which Sharp will need to resolve before the deal is finalized.

    Article Link: Apple Supplier Foxconn to Acquire Sharp for $6.2 Billion [Updated]
  2. skinned66 macrumors 65816


    Feb 11, 2011
    Ottawa, Canada
  3. Crosscreek macrumors 68030


    Nov 19, 2013
    Interesting acquisition with interesting possibilities for all parties.
  4. bladerunner2000 macrumors 68000


    Jun 12, 2015
    Foxconn should just make their own phone and cut out Apple. They're getting middled.
  5. Tubamajuba macrumors 68000

    Jun 8, 2011
    Yep. Poor Foxconn, making money from a phone that just keeps selling and selling.
  6. rulymammoth macrumors member

    Jun 8, 2015
    Well, they're doing what any company with their resources would do. Move down the supply chain where the margins are higher.
  7. acegreen macrumors regular


    Jun 25, 2015
  8. iamMacPerson macrumors 68030


    Jun 12, 2011
  9. Robert.Walter macrumors 65816

    Jul 10, 2012
    Re margin, Except if you are a Japanese maker of displays.
  10. ThaRuler macrumors regular


    Feb 16, 2016
    Who knew Sharp was getting dull this whole time?
  11. Mr. Donahue macrumors 6502

    Mr. Donahue

    Sep 17, 2014
  12. B4U macrumors 65816


    Oct 11, 2012
  13. R3k macrumors 6502a

    Sep 7, 2011
    Sep 7, 2011
  14. \-V-/ Suspended


    May 3, 2012
  15. WigWag Workshop macrumors 6502

    WigWag Workshop

    Feb 3, 2011
    Central Ohio (Born and Raised in SE WI)
    So is this another nail in the coffin for Samsung supplying Apple with parts for their devices?
  16. jdillings macrumors 65816

    Jun 21, 2015
    No because Sharp doesn't make OLEDs. Apple is still stuck with either LG or Samsung if they start using OLEDs.
  17. macs4nw, Feb 24, 2016
    Last edited: Feb 24, 2016

    macs4nw macrumors 68040


    That's for sure! Being big or well entrenched, by itself doesn't cut it anymore. At 103 years old, Sharp is one of the oldest consumer-electronics manufacturers around.

    This just goes to show how intense and cut-throat the tech industry has become. Unless you're continuously moving forward, you risk becoming irrelevant and falling on hard times, no matter who you are.
  18. kiancheong macrumors member

    May 18, 2011
    Whose design would it be? Oh, Apple's design. Yup, let's do it!
  19. Mr Kram macrumors 68000

    Mr Kram

    Oct 1, 2008
  20. ryuworks macrumors member

    Sep 20, 2007
    Apple is partly behind this takeover, some years back there were reports that Apple wanted a proxy takeover of Sharp via Foxconn when this whole thing started. This move can only be beneficial to Apple, as its number one contractor now has rights to IGZO and other display techs that Sharp owns, when in previous years Apple had to content and negotiate with a not-so-friendly Sharp to make them license IGZO tech to other Apple contractors.
  21. kdarling macrumors demi-god


    Jun 9, 2007
    Cabin by a lake
    Working with Apple has pros and cons. Some cons:

    - Foxconn's profit margins dropped after they took on making Apple products.

    - Increased scrutiny due to Apples involvement has meant paying higher wages.

    - Apple production requirements swing wildly during the year, meaning it's hard to keep a stable workforce and revenue.

    Partly, for sure. Buying Sharp gives Foxconn a well known brand name, under which they could sell their own devices.

    Apple owned some production equipment. Samsung also had a stake. Sharp wanted to sell displays to both companies, which of course Apple was against.

    Now Foxconn can control sales, which can be good or bad for Apple. At the least, Foxconn can make more money.

    We will have to wait for more info on their intentions.
  22. JM macrumors 6502a


    Nov 23, 2014
    does anyone know if it was the Sharp or Samsung (or someone else) displays that have the terrible pixel size vertical lines? interlacing, screen door, whatever you want to call it.... some 5s' have it, and others don't.
  23. OldSchoolMacGuy macrumors 68020


    Jul 10, 2008
    Huge news.

    Though Foxconn already produced all of Sharps electronics anyways. They make most everyone's. It's funny how Apple has always gotten the brunt of the bad Foxconn press, when they product electronics for Sony, Samsung, Microsoft, Amazon, Philips, Google, HTC and pretty much everyone else.
    --- Post Merged, Feb 25, 2016 ---
    Not really. Doesn't matter how innovative and forward thinking you are, there's always someone who can buy you out. Look at Budweiser. The largest brewer in the world and they were bought out by a smaller brewer.
  24. Rocketman macrumors 603


    Foxconn is buying in place manufacturing capacity, will add a layer of better management to use those resources, gets considerable IP, and has access to the Chinese discount window to take over the debt. Notably once they have improved the balance sheet they will also have access to Japanese banking rates at record low rates. They will be able to juggle between currencies too, Chinese, Japanese, United States, Euro and more. The $6.2B overpayment will pale in comparison to the revenues they generate and the financial engineering they can do with it.

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