AMANDA KRETSCH WRITES – Taiwan’s Hon Hai Precision Industry Co. has sealed the deal to take over and revive Sharp Corp, making this acquisition the first time a foreign company will acquire a Japanese electronics manufacturer.

Hon Hai and Sharp negotiated for months, but with the downturn of Sharp, a rescue plan drafted by Hon Hai. Sharp took the offer as a means to save the company.

Six years ago, Sharp was a strong electronics manufacturer, known globally for their manufacturing of LCD screens, solar panels, and other electronics. However, on May 14, 2015, Sharp decided to actively pursue a second restructuring because of two past bailout initiative failures. Experts at The Economist believe that, compared to competitors like Sony and Panasonic, Sharp lacks the ability to keep up with the demands of a globalized electronics manufacturing industry.

Hon Hai officials held off on the acquisition deal until they were able to see all of Sharp’s liabilities, which was smart business: there happened to be a lot.

Hon Hai was particularly interested in Sharp’s LCD products, which is what Sharp will be offering Hon Hai in order to secure the acquisition deal. The Taiwanese company has already shelled out a ¥100 billion down payment.

As reported by The Japan News, “Hon Hai group, better known as Foxconn Technology Group, will invest ¥388.8 billion to acquire 66 percent of Sharp’s voting rights.”

Analyst, Katsura of SMBC Nikko Securities thinks that Sharp “is behind in terms of experience and technology to mass produce. But it’s not that they have no chance to catch up.”

With this in mind, Gou, CEO of Hon Hai, announced his plans for reconstruction, saying “If I don’t have a road map in my heart, I would not be working so hard and come so far to make this important investment,” as reported by The Japan Times.

Gou feels confident he can make Sharp successful again in a projected two-to-four years. After all, he founded the largest global manufacturer of electronics. In the meantime, many analysts and experts expect that competitors like Samsung will try to gain a larger market share, before the new-and-improved Sharp makes its comeback.