Foxconn, the assembler of Apple’s iPhones, have finally agreed to acquire Japanese technology company Sharp Corp after more than a month of delay.
Officially registered as Hon Hai Precision Industry Co, Foxconn will pay $3.5 billion for a two-thirds stake of Sharp. The final deal is $900 million lower than the initial offer, the two companies announced.
Foxconn announced it will purchase Sharp’s shares at 88 yen per share, 35 percent less than Wednesday’s closing price.
Sharp Corp’s shares gained 4% on Wednesday ahead of the press conference announcing the deal.
The acquisition is seen as a strategic move for Foxconn, and a shot in a the arm for Sharp.
Analysts believe Apple Inc, Foxconn’s biggest client, is on the verge of adopting a newer display technology for its iPhone offering. The Cupertino-based smartphone maker currently uses liquid crystal display technology, but will reportedly shift to organic light-emitting diode (OLED) displays in two years.
The deal, which is the biggest acquisition by a foreign company of a Japanese technology company, will give Foxconn control of Sharp’s advanced screen technology. Observers say the deal will put Foxconn in a better position to corner display contracts from major client Apple Inc.