Foxconn will acquire two-thirds of Sharp, in what will be the largest acquisition of a Japanese tech firm by a foreign company. Foxconn has initially offered about $5.3 billion, then raising it to $5.8 billion.

The increased bid was probably to see off rival bids from Samsung which were rumoured to be going on behind the scenes. The deal makes Foxconn the biggest Apple supplier, since Sharp was one of Apple's main suppliers of iPhone displays. The agreement will see Sharp start mass-producing organic light-emitting diode (OLED) screens by 2018, around the time Apple is expected to adopt the next-generation displays for its iPhones.

Sharp's board voted unanimously to accept the offer over a rescue by a state-backed investment fund but it is unclear what the Japanese government will think. Sharp said it aimed to become a global supplier of OLED screens, which are thinner, lighter and more flexible than current displays. South Korea's Samsung Display and LG Display are also investing heavily in the new technology.

The Japanese firm was once a highly profitable manufacturer of premium TVs and a favoured screen supplier to Apple. But it has struggled in recent years as massive investments in advanced LCD plants failed to pay off amid price competition with Asian rivals, and two bank bailouts since 2012 did little to help turn its business around.