Home > Latest News > BREAKING NEWS:Sharp Deal Put On Hold After Foxconn Discover More Liabilities

BREAKING NEWS:Sharp Deal Put On Hold After Foxconn Discover More Liabilities

BREAKING NEWS:Sharp Deal Put On Hold After Foxconn Discover More Liabilities

Liabilities not disclosed by the debt riddled Sharp Corporation is set is set to scuttle the announcement made yesterday that Foxconn was set to buy the Japanese display Company.

Shortly after Sharp announced that they had agreed to sell the business to Taiwanese based Foxconn previously undisclosed liabilities were discovered by Foxconn auditors throwing into doubt what was set to be the biggest takeover by a foreign firm in Japan’s technology sector.
 
Loss-making Sharp announced earlier in the day that it had agreed to be bought by Foxconn, a contract manufacturing firm that is a major Apple Inc supplier.
 
Then in a separate statement issued overnight Australian time, Foxconn said it would not sign until it had clarified terms in “new material information” from Sharp. It did not elaborate.
 
Two sources with direct knowledge of the matter said the Japanese group had contingent liabilities that amounted to “hundreds of billions of yen”.
 
That issue would have to be resolved before a deal could be finalised, said the sources, who spoke on condition of anonymity as the talks were confidential.
 
The sources did not elaborate on the nature of the liabilities or the exact amount. Reuters has not seen a copy of the new information.
 
A spokesman for Foxconn, known formally as Hon Hai Precision Industry Co Ltd, declined to comment on the issue. Sharp also declined to comment.
 
FIVE YEARS IN THE MAKING
 
The 11th hour delay jeopardizes a deal that would have marked the conclusion to five years of courting by Foxconn founder and billionaire Terry Gou and the opening up of Japan’s insular tech sector to foreign investment.
 
The loss-making display maker said earlier in the day that it would issue around $4.4 billion worth of new shares to give Foxconn a two-thirds stake. Foxconn’s investment is set to total more than 650 billion yen ($5.8 billion), a separate source familiar with the matter said.
 
If a deal does go through, it would boost Foxconn’s position as Apple’s main contract manufacturer and enable Sharp to 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.
 
Foxconn sees ownership of Sharp as a way to better compete with Asian rivals such as Samsung Electronics Co.
 
“Sharp has the technology to build out the components to compete with Samsung as an Apple supplier, which means that with Sharp under its umbrella, Foxconn can help Apple wean itself off Samsung,” said Gavin Parry, managing director of Parry International Trading, a brokerage in Hong Kong.
 
“This gives Foxconn better pricing power with Apple,” he added.

 



You may also like
Sharp QDEL display. Source: Digital Trends.
QDEL Screens Could Be The Next Big TV Trend
Sharp To Showcase Various New Products At CES
Foxconn Founder Quits Politics, Leads Company Instead
Key Apple Partner’s Stock Tumbles, China’s Scrutiny
Sharp Consumer Brand Growing In OZ, New 5 in 1 Microwave With Air Fryer Coming