Takeover deal between Foxconn and Sharp apparently put on hold
A deal that would’ve brought together two major Apple suppliers has apparently been put on hold. Late on Wednesday, financially troubled Japanese electronics company Sharp—which is known for its display manufacturing prowess—announced that it had agreed to be acquired by Taiwan-based Foxconn, a large contract manufacturer that has a major role in the production of Apple’s iPhone.
According to a statement by Sharp [PDF], the plan would have seen Foxconn buy the company’s shares, worth roughly $5.25 billion. In all, the deal had been estimated to be worth just over $6 billion.
That statement by Sharp was rebutted, just hours later, by Foxconn.
In a Wall Street Journal report, Foxconn said that it is delaying the signing of a definitive Sharp takeover agreement after learning more about just how financially unstable the company is via details Sharp disclosed a day earlier. Those details, according to the Journal’s sources familiar with the matter, included roughly ¥350 billion ($3.11 billion USD) worth of “contingent liabilities,” which are defined as costs that a company might face in the future based on the outcome of lawsuits, accounting changes, supply contracts, and other uncertain circumstances.
“We already notified Sharp on the same day [before Sharp held its board meeting on Thursday] that our side had to clarify the contents,” Foxconn said in its statement, via the Journal. “We have to postpone the signing before both sides can reach an agreement. We hope to clarify it quickly and to bring this deal to a successful conclusion.”
Over the past few weeks, with speculation of a takeover deal taking shape, shares of Sharp role around 30 percent, according to CNN Money. But after the details of the presumed done-deal were announced, the took a nosedive falling off by 14 percent.
These are just the latest twists in the effort to find a suitor for the display manufacturer. The company has also been in talks with Innovation Network Corporation of Japan.