Foxconn to Close Inefficient Units at Sharp

TAIPEI—Foxconn Technology Group plans to close inefficient subsidiaries at Sharp Corp. after completing its $3.5 billion acquisition of the unprofitable Japanese electronics maker.

Terry Gou, Foxconn's founder and chairman, said at the Taiwanese company's annual shareholder meeting Wednesday that he also plans to accelerate commercialization of Sharp's patents to help turn the business profitable.

"Sharp has lots of technology but it isn't able to market it," he said. "Turning patents to technology, then turning technology to products, that's what we are good at."

Foxconn, formally known as Hon Hai Precision Industry Co., is the world's largest electronics contract manufacturer and a key supplier for Apple Inc. and other major brands.

Mr. Gou said Foxconn has completed legal aspects of the takeover and new management will oversee Sharp starting next month.

Foxconn plans to close some of Sharp's redundant and inefficient overseas operations, including some sales joint ventures, Mr. Gou said.

"Sharp has too many subsidiaries, which results in too much overhead," he said.

Foxconn posted in May a 9.2% decline in first-quarter net profit to 27.58 billion New Taiwan dollars ($848.2 million), as growth slowed in the global smartphone market.

Mr. Gou said Tuesday that the company faced challenging market conditions, including a trend of growing protectionism in many countries.

Write to Eva Dou at [e-mail]

(END) Dow Jones Newswires

June 22, 2016 09:35 ET (13:35 GMT)

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