Cornell Mergers and Acquisitions Club

Foxconn Acquires Sharp for an estimated 3.5 billion!

The following write up has been provided by Junior Analyst Jaidev Singh, who summarizes and explains the acquisition and predicted impact.

Summary:

Taiwanese company Hon Hai Precision Industry Co, better known as Foxconn cleared China’s anti-monopoly authorities, ending a four year pursuit in its acquisition of Japan’s Sharp Corp (August 11 2016). Reuters reports the deal to be worth 388.8 billion Yen ($3.8 billion), whereas Bloomberg put the number at 389 billion yen ($3.5 billion). The deal will give Foxconn a controlling two-thirds share in Sharp (Reuters). The prolonged Chinese antitrust review had earlier prevented the deal from going through in June. This had initially raised fears among investors that the deal might fail, thus sending Sharp shares briefly below the planned acquisition cost of 88 yen.

Background:

Sharp Corp is the world’s largest contract electronics manufacturer. Foxconn sought control of Sharp’s panel technology in order to strengthen its position with major client Apple Inc.

Sharp bet big on large size screens, investing 1 trillion yen to build factories, but as LCD prices fell and the currency rose to a post World War II high, Sharp shifted attention to smaller sizes for high-end smartphones and tablets. It managed to capture Apple Inc as a customer, but orders were cut after it struggled to consistently deliver volumes.

Impact:

The biggest beneficiary of Foxconn’s infusion into Sharp will be its display business. About 200 billion yen will be used to launch production of next-generation screens using organic light-emitting diodes (OLED screens). These are expected to be adopted by Apple for its next generations of iPhones. Sharp is currently lagging behind its Korean rivals in the OLED panel market (Fortune). Another 60 billion yen will be spent to improve yield and increase production volumes of the existing LCD operations.
The combination of the world’s largest assembler (Foxconn) and Sharp’s electronics technology as the world’s largest contract electronics manufacturer will give both companies a significant edge in taking a hold of the emerging Internet-of-things devices.

http://www.reuters.com/article/us-sharp-hon-hai-idUSKCN10M1RI

Foxconn clears China's anti-monopoly review for $3.8 billion deal with Sharp Taiwan's Foxconn said on Thursday China's anti-monopoly authorities approved its acquisition of Japan's Sharp Corp, paving the way for the world's largest contract electronics manufacturer to seal a $3.8 billion deal.

Hi everyone,
Great career opportunity coming up tomorrow afternoon, Roger Marinzoli from TIAA will be speaking in Sage Hall room 144 at 5.00 PM. He will be giving a career talk and info session about TIAA. They are currently looking for an intern within a M&A/Corporate Development position. If you are looking for an internship this summer or are generally interested in a career in M&A this is an awesome opportunity to speak with an experienced professional. You can apply for the internship on handshake here is the link: (http://careers.tiaa.org/job/6429361/internship-corp-strategy-development-undergrad-new-york-ny/)

INTERNSHIP - Corp Strategy & Development (UNDERGRAD)

Hi everyone, the first info session which was scheduled for today has been postponed to the week after break.

Two giants in the U.S. paint industry, Sherwin-Williams and Vaspar have agreed to an $11.3 billion merger. Estimates show annual cost savings upwards of $280 million. Pro forma revenues for the combined company last year would have come to $15.6 billion. This has been declared a major boost for mergers & acquisitions which have seen a drop in global activity this year.

http://www.cnbc.com/2016/03/20/financial-times-sherwin-williams-in-11bn-us-paint-tie-up.html

Sherwin-Williams, Valspar to unite in $11B deal Sherwin-Williams and Valspar, two of the biggest names in the US paint industry, have agreed to merge in a $11.3 billion deal, The FT reports.

AMC has agreed to acquire Carmike for $1.1 billion ($30 per share; 19.47 percent premium on closing price at March 3), making it the largest theater chain. After overcoming lawsuits with regard to the Sherman Act, the company will now overtake Regal as the number 1 industry provider. Reports project annual synergistic gains of $35 million.

https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=newssearch&cd=1&cad=rja&uact=8&ved=0ahUKEwiC3ui1gK7LAhXIKB4KHTfiDjEQuogBCCEoBTAA&url=http%3A%2F%2Fwww.hollywoodreporter.com%2Fnews%2Famc-buys-carmike-theater-chain-872653&usg=AFQjCNFsEJ6EnOH0CeNI44zsRP8Kw6oEqA&sig2=KzOawCls-x8M7c_k2m_7nA

Mergers and acquisitions (M&A), corporate restructuring, and corporate law are a big part of the finance world. Every day, Wall Street investment bankers arrange M&A transactions, which bring separate companies together to form larger ones. The Cornell Mergers and Acquisitions Club performs case studies on current and past successful and failed M&As. We also host guest speakers, who talk about their personal experiences in the industry. The experiences students gain in CM&A provide them with the tools and background necessary to pursue leadership roles in the industry of investment banking.

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