Foxconn Workers
Workers are seen inside a Foxconn factory in the township of Longhua in the southern Guangdong province, May 26, 2010. REUTERS/Bobby Yip

UPDATE: 4:05 a.m. EDT — Foxconn is buying a 66 percent stake in Japan's Sharp for 389 billion yen ($3.4 billion), according to statements released by the two companies Wednesday, Bloomberg reported. The Taiwanese contract manufacturer will finally have its own brand of products, which is already well-recognized the world over.

Shares of Sharp jumped 3.85 percent on the Tokyo Stock Exchange toward close, before the expected deal was announced. Trading of Foxconn shares in Taiwan was suspended Wednesday.

Original story:

The boards of Foxconn and Sharp will meet separately on Wednesday, and are expected to discuss the former’s revised takeover offer for the troubled Japanese company, which the Taiwanese electronics manufacturer has reduced by over $2 billion, or a third of the earlier price tag of $6 billion.

Under terms of the revised offer, Foxconn would pay 389 billion yen ($3.4 billion) to Sharp, which would issue new shares to Hon Hai Precision Industry — Foxconn’s parent company — giving it a two-thirds stake, according to reports. The figure is 100 billion yen less than Foxconn’s earlier offer. The Taiwanese company is also expected to pay 88 yen for each Sharp share, down from 118 yen announced earlier, the Financial Times (FT) reported.

Additionally, a separate agreement, worth 45 billion yen, for Foxconn to buy the land beneath a Sharp factory in Sakai, Japan, was canceled, according to the Wall Street Journal.

People familiar with the matter told the Journal that the revised offer from Foxconn came after it spent extra time carrying out due diligence.

According to the original offer, Foxconn also planned to buy 100 billion yen worth of preferred Sharp shares from Mizuho Bank and Bank of Tokyo-Mitsubishi UFJ. Under the revised terms, however, the two banks would reportedly allow Foxconn to delay buying those shares for about three years. The two banks are also expected to extend a credit line of 300 billion yen to Sharp to make up for the shortfall from the revised valuation by Foxconn.

The earlier offer by Foxconn had been approved by Sharp’s board late in February but was put on hold by the Taiwanese tech giant — it is a contract manufacturer for easily recognizable gadgets such as iPads, Kindles and PlayStations — when the Japanese consumer electronics maker revealed it had previously undisclosed future financial risks of 350 billion yen.

Foxconn CEO Terry Gou adopted a tougher negotiating position, especially since Sharp is under pressure to sign a deal before a bulk of its loans expire at the end of March, according to FT.

“Mr. Gou had the upper hand in the negotiations. There was no reason for him to rush if he can get better terms,” a person with knowledge of the negotiations told FT.

The revised offer from Foxconn is quite similar to an earlier competing bid for Sharp by state-backed Innovation Network Corporation of Japan.

Gou has earlier said he wants to revive the ailing century-old Japanese company rather than break it up. Foxconn is also expected to change a lot of Sharp’s management, including its CEO, Reuters reported.