Tokyo, March 30

It took a century for Sharp to evolve from making pencils into one of the world’s top consumer electronics brands, but the Japanese company has now signalled another huge shift: It will become Taiwanese.

Sharp became a household name as one of the first major producers of LCD technology, but misjudged investments have left it grappling with mounting losses and saddled with huge debts.

A restructuring plan failed to stop the bleeding and Sharp today agreed to be bought by Taiwanese multinational Hon Hai Precision, the world’s biggest electronics supplier, better known as Foxconn.

The $3.5 billion deal — hailed by the firms as a ‘historic strategic alliance’ — marks the first foreign takeover of a Japanese electronics giant, after Sharp eschewed merging with a domestic rival.

It also marks a watershed for Japan’s once-mighty home electronics sector, which nurtured global brands including Sony and Panasonic but has struggled in the face of foreign competition.

“Sharp has competitive know-how and technologies. For Hon Hai, it’s a good buy,” said Hideki Yasuda, an analyst at Ace Research Institute in Tokyo. “It wanted a brand for finished products and it can make use of the Sharp name.”

Sharp is a global leader in small- and medium-sized LCD screens, which are a key asset for Hon Hai.