Foxconn puts $5.8 billion Sharp takeover deal on hold at the last minute

by: Robert TriggsFebruary 25, 2016

Sharp Aquos-23

Struggling Japanese electronics firm Sharp had almost secured a takeover deal with device manufacturer Foxconn today, but it appears that the plans have been put on hold at the last minute.

The two companies had initially announced an agreement that would have seen Foxconn take ownership of two-thirds of the company with $4.4 billion of new shares, although Sharp would continue to operate independently. This would have been followed by a further $1.4 billion worth of investments. However, Foxconn now says that it has received some new information from Sharp that it needs to clarify before going ahead with the deal.

According to the Wall Street Journal, the new information is a list comprising 350 billion yen ($3.1 billion) of contingent liabilities at Sharp. This news casts serious doubts over the future of the arrangement, which could well be scrapped. The company’s shares had already fallen some 14 percent after details about the deal were confirmed.

“After receiving new material information from Sharp yesterday morning, we have accordingly informed Sharp last night that we will have to postpone any signing of a definitive agreement until we have arrived at a satisfactory understanding and resolution of the situation.” – Foxconn

Foxconn entered the picture just last month, offering up a $5.8 billion sum for the struggling manufacturer. Interestingly, Foxconn builds Apple’s iPhone and Sharp had been making LCD displays for the handsets, so there’s likely an interest for Foxconn in bringing production under a single roof.

Sharp 736ppi display demoSee also: Sharp gearing up Super IGZO display production8

The news of a deal has been widely expected, as Sharp is in some rather deep financial trouble. The company has long been struggling with high yearly losses and substantial levels of debt. Last year alone the display manufacturer noted a loss of $1.9 billion despite of massive cutbacks, and the company owes over $4.4 billion in debt to a variety of Japanese banks.

Sorting out this latest development could take some time, something that Sharp is quickly running out of.

  • vmxr

    gone with the old in with the new nothing last for ever :/

  • ryq24

    This is just a start. Soon more Japanese companies will either close shop or will be bought by foreign companies.

  • basejumpbr

    Japanese Companies was ingenous taking all Infra esctruture and Tecnology to China…Now chineses manufactor your own brand more cheap…They killed the concept MADE IN JAPAN…

  • T.J.

    It’s like when you’re bidding on an auction on eBay and you keep getting outbid. So you keep bidding and eventually win, only to realize that you didn’t actually want to spend that much and debate whether or not to go through with it.

  • King_Android

    Rebrand. Sharp is looked as cheap junk in the eyes of consumers. Most arent familiar with the displays being mostly from Sharp. So reimage your brand. Place a premium feel of your product and become efficient with costs and think outside the box. Its there for the taking as phones, electronics are at a stalemate currently. LG thought outside the box. We will see how effective they will be. But so much more can be done.

  • basejumpbr

    With the Japanese population shrinking and facilities to Chineses come to live and work in not to far Japan turn a Chinese Territory…

  • Luka Mlinar

    I bet OEMs threatened to stop making phones in their factory if they bought Sharp. I would in their position anyway. I mean here you have a company like Apple sending in their schematics for a new phone 6 months before the damn thing hits the shelves to a rival OEM no less. Yea right!

  • basejumpbr

    China is promoting a quiet invasion of the Army need anymore..buying Ocidental Companies..The last one will be the symbol of USA…APPLE…Stay Turn….