A US$850 million deal between Taiwanese electronics giant Hon Hai Precision Industry and Japan’s Sharp was still on hold Friday, as roller-coaster negotiations continued without the head of Hon Hai, who reportedly cut short his trip to Japan.
Talks between the companies continued Friday to revive the deal, a Sharp spokesman said. The agreement, originally announced in March, would give Hon Hai, the parent company of Foxconn Technology Group, a nearly 10 percent stake in Sharp, as well as almost half ownership of one of Sharp’s main LCD panel factories.
But the deal was delayed as Sharp’s stock price plummeted and Taiwanese regulators rejected it, saying the profitability of the investment needed to be considered.
Terry Gou, the chairman and founder of Hon Hai, was in Japan this week and was scheduled to speak at a press conference Thursday in Sakai, a city in central Japan, after taking a tour of the massive factory and meeting with Sharp’s top executives. But Gou mysteriously didn’t show at the press conference, drawing the ire of Japanese reporters.
Foxconn representatives and executives have repeatedly said in recent weeks that they wanted to complete a deal by the end of August. Calls to a company spokesman went unanswered Friday.
Sharp spokeswoman Miyuki Nakayama said the two sides are in active talks and an announcement would be made when a final decision is reached.
The company is scrambling to shore up its finances as it faces huge operating losses, as it has been hurt by the falling prices of LCD panels and TVs. It is trying to refocus more on screens for smaller devices like tablets and smartphones, and is reportedly one of the suppliers for Apple’s upcoming iPhone release.
Earlier in the week, Sharp announced it would reduce its headcount by 2,000 through an early retirement offering to employees in Japan. The company, which has about 60,000 workers in total, has said it will reduce 5,000 globally this fiscal year through March.
On the Japanese stock market, investors reacted to the lack of a concrete agreement by sending Sharp shares down over 12 percent by late Friday. Sharp shares had risen in recent weeks on hopes the deal would go through.