Foxconn asks Apple to join bid

Taiwan electronics giant Foxconn has proposed taking over troubled Japanese behemoth Sharp's display business, the Nikkei business daily reported on Monday, and has urged Apple to join the deal.

Under the new proposal, Foxconn -- an Apple supplier -- would take a majority stake in Sharp's liquid crystal display 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 and the extent of Apple's possible involvement.

But it said Sharp's major lenders had estimated the firm's LCD operations to be worth around 300 billion yen ($2.5 billion) earlier this year.

The fall in price of small- to medium-size 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 -- 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 city in 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 Nikkei 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 Aquos brandmaker 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 positions worldwide as part of a turnaround plan.

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

Some Sharp insiders favour the Japanese fund in order to keep the electronics maker's technology away from non-Japanese businesses, the Nikkei said.

But Apple might support the Foxconn proposal to prevent a merger between two Japanese display firms, which would reduce the US company's supplier options and make controlling costs more difficult, the Nikkei said.
Source: AFP