Foxconn suspended a deal with Sharp

Japanese electronics manufacturer Sharp has almost completed the deal on the absorption of a Foxconn corporation today, but it seems that plans have been postponed at the last minute.

Foxconn suspended a deal with Sharp



Initially, it was announced that an agreement between the companies, in which Foxconn would become the owner of the two-thirds of the company’s shares for $ 4.4 billion, while Sharp will continue to operate independently.

Then, Foxconn plans to invest another $ 1.4 billion. However, Foxconn is now the company said it had received new information from the Sharp, they should make it clear before the deal is completed.

According to the Wall Street Journal, the new information – a list of contingent liabilities Sharp, including 350 billion yen ($ 3.1 billion).

This news casts serious doubts about the prospects for an agreement, which ultimately can not be held. The company’s shares have fallen by 14% after the transaction confirmed the information.

Last month, Foxconn offered $ 5.8 billion for the Sharp. Interestingly, Foxconn produces for Apple’s iPhone company, and Sharp supplying screens for smartphones, so the interest in ensuring the Foxconn manufacturing under one roof is clear.

News of the deal has been brewing for a long time, as Sharp are deep financial crisis. The company is struggling with annual losses, and a significant amount of debt.

Last year alone, despite a massive reduction, making displays, it was noted a loss of $ 1.9 billion, as the company owes more than $ 4.4 billion in Japanese banks.

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