Taiwanese manufacturer and mobile operator Foxconn has paused plans to acquire loss-making Japanese electronics maker Sharp after receiving newly-disclosed information. Sharp had announced earlier in the day that it had had agreed to be bought by Foxconn, which makes smartphones including the iPhone, in a deal worth some US$6bn.
Taiwanese manufacturer and mobile operator Foxconn (TPE:2317) has paused plans to acquire loss-making Japanese electronics maker Sharp (TYO:6753) after receiving newly-disclosed information.
Sharp announced today that it had had agreed to be bought by Foxconn, which makes smartphones including the iPhone, in a deal worth some US$6bn. However, just hours later, Foxconn said in a separate statement that it would not sign a definitive agreement until it had time to consider “new material information” disclosed by Sharp. Foxconn provided no further details.
According to a Wall Street Journal report citing people familiar, the new information was a list of potential liabilities totalling some Y350bn (US$3.1bn), which Foxconn would have to assume if it took over the company.
Foxconn, formerly known as Hon Hai Precision Company, and Sharp have declined to comment.
Sharp said in its statement that it would issue around Yn489bn (US$4.3bn) worth of new shares to give Foxconn an approximate two-thirds stake in the company. Together with other considerations, the deal value is close to US$6bn.
The Japanese manufacturer noted that it had recorded large deficits for the year ended March 2015 resulting from factors such as increased competition in the LCD TV business in the US, reduced demand for energy solutions and a lack of foresight in responding to market changes.
In 2012, Foxconn had agreed to buy 10% of Sharp for about US$800m but talks later collapsed.