Foxconn / Sharp: A Global Power Shift?

Foxconn will take over Sharp in a deal worth about 700 billion yen (about $6.24 billion), Sharp announced today, confirming months of reports that the huge Taiwanese corporation was looking to buy the Japanese firm. Foxconn's share purchase will give it control of 65.9 percent of Sharp, the Taiwanese company beating out competition from a Innovation Network Corp. of Japan, a group funded by the Japanese government, to complete one of the biggest ever acquisitions of a Japanese company by a foreign entity.

However, after Sharp accepted its bid, Foxconn said it would delay signing the takeover agreement. According to sources speaking to The Wall Street Journal, Foxconn received a list of "contingent liabilities" worth ¥350 billion from Sharp on Wednesday.


How is this a global power shift?

  1. Biggest acquisition of a Japanese company by a foreign entity
  2. Trend of acquisitions by Asian companies

IMO, ten years ago it could sound like a joke. But now there are well-known Chinese / Taiwanese brands and they have money to make such kind of purchases.

The Chinese companies are driven significantly by China government policy / debt expansion.

As an analogy, 25 years ago, 'everybody' was convinced that the Japanese were going to buy everything and then it collapsed.

Now, maybe China wins this time but there is definitely risk from such a debt binge and paying such premiums for mature companies.

But now there are well-known Chinese / Taiwanese brands and they have money to make such kind of purchases.

So where is the "power" shifting to, China or Taiwan?

China and Taiwan are about as unified as the U.S. is to Cuba...

little more info on the subject

http://www.zerohedge.com/news/2016-02-25/foxconn-ices-sharp-deal-after-seeing-how-bad-books-are

not really sure with the amount of debt Sharp has its going to be a "global shift" though.

I think that debt is not a deal braker for them, they are interested in an access to technologies & established world-wide (respected in Japan) brand.

Update: "Foxconn will pay about $3.5 billion for a two-thirds stake, nearly $900 million less than its initial offer, the companies said."