In a joint press release, Foxconn and Sharp described themselves as world-class technology industry leaders and said they would form a historic strategic alliance.
Founded in 1912, Sharp designs and manufactures electronic products. The company employed 49,096 people globally as of March 2015.
Sharp president and CEO Kozo Takahashi said: "I am pleased with our decision today to form a strategic alliance and merge both forces between Sharp and Foxconn to accelerate innovation with the "creativity and entrepreneurial spirit" of both our companies."
Foxconn founder and CEO Terry Gou said: "We have much that we want to achieve and I am confident that we will unlock Sharp’s true potential and together reach great heights."
Sharp lowered its operating profit forecast due to weak demand for smartphone displays.
The company expects its operating income to be ¥10bn ($83m) for the year ending March 2016, compared with an earlier estimation of ¥80bn.
Sharp’s liquid panel display business recorded an operating loss of ¥13.7bn ($114m) with consolidated sales of ¥907.1bn ($7.5bn) in fiscal 2014.
The acquisition is expected to help Sharp remain in business and limit the risks of a major loss.
Last May, the Japanese firm sought a bailout of roughly $1.9bn from banks and said that it would cut 5,000 jobs.
Foxconn has also unveiled its financial results the fourth quarter after signing the agreement with Sharp.
Net profit declined in the fourth quarter, hurt by a slowdown in demand for smartphones. Net income in October-December dropped 6.67% to $1.6bn, while revenue slipped 4.69%.
This article is from the CBROnline archive: some formatting and images may not be present.
Join Our Newsletter
Want more on technology leadership?
Sign up for Tech Monitor's weekly newsletter, Changelog, for the latest insight and analysis delivered straight to your inbox.