Sharp Shareholders Approve Acquisition by Hon Hai

Osaka, June 23 (Jiji Press)--Shareholders of Sharp Corp. <6753> on Thursday approved the planned acquisition of the struggling Japanese electronics maker by Taiwan's Hon Hai Precision Industry Co. The shareholders, meeting in the western Japan city of Osaka, gave the green light to a plan to issue new shares for allotment to the Taiwanese electronics assembler. They also approved a proposed slate of candidates to Sharp's board of directors, including Tai Jeng-wu, executive vice president of Hon Hai, who will become Sharp president after the acquisition. Hon Hai, known as Foxconn Technology Group, plans to invest 388.8 billion yen to become the biggest shareholder of Sharp, with a stake of 66 pct in terms of voting rights. The acquisition will help Sharp and Hon Hai complement each other's strength and make them more competitive, Sharp Executive Vice President Katsuaki Nomura told the shareholders. At the opening of the shareholders meeting, Sharp President Kozo Takahashi apologized for the massive net loss that the company posted for the second straight year in the year ended in March. "Under the strategic partnership with Hon Hai, we'll accelerate efforts toward reconstruction and growth," Takahashi said, seeking shareholder understanding of the acquisition by the Taiwanese company. Sharp's management faced criticism from some shareholders who complained that the amount of investment from Hon Hai was reduced from initial plans due to its contingent liabilities which may become losses in the future. Sharp's board will have nine members after Hon Hai's acquisition, of which six were nominated by the Taiwanese company. Takahashi is scheduled to step down after the acquisition. The shareholders also approved a plan to relocate Sharp's headquarters from Osaka to Sakai, both located in Osaka Prefecture. END