Taiwan's Hon Hai Precision Industry Co. and Sharp on Saturday signed a takeover agreement after a month of reviews, paving the way for the acquisition of the Japanese electronics maker. Sharp President Kozo Takahashi and Hon Hai Chairman Terry Gou signed the deal at a plant in Sakai, Osaka Prefecture, that has been operated jointly by the two companies since 2012. Hon Hai will take a 66 percent stake in Sharp.

The deal comes after Hon Hai, also known by its trade name Foxconn, decided to go ahead with its takeover of Sharp, but at a reduced price of 388.8 billion yen (about $3.5 billion), significantly down from the initially planned 489 billion yen.

Takahashi said the strategic alliance will help improve Sharp's finances and invest in research and development.

Gou vowed to turn Sharp around to make it a "leading global consumer brand," expressing hope of investing in new technology, including cutting-edge displays as now is a "critical timing."

Foxconn Vice Chairman Tai Jeng-wu said he wanted Sharp to use part of the funds it will raise from the Taiwan firm's investment in it to buy back its headquarters in Osaka, western Japan.

Strapped for cash, Sharp sold the building housing its headquarters earlier this year and has been renting out the property.

In late February, Hon Hai put the deal on hold to review Sharp's finances after the Osaka-based firm provided information about contingent liabilities.

Sharp plans to invest 200 billion yen of the capital to be raised to prepare for mass-production of next-generation light-emitting diode displays that could be used in future models of Apple's iPhone.

Hon Hai will be able to gain access to Sharp's advanced technology for liquid crystal displays and expand its business through the takeover.

For fiscal 2015, which ended Thursday, Sharp expects an operating loss of 170 billion yen on sales of 2.45 trillion yen, downgraded from earlier estimates.