Foxconn agrees to, then delays, Sharp acquisition

February 25, 2016 | 14:39

Tags: #acquisition #financial #takeover

Companies: #foxconn #hon-hai-precision #japan #sharp

Hon Hai Precision, better known as the electronics assembly giant Foxconn, has agreed to acquire Sharp for $4.3 billion - but a last-minute delay has thrown the deal into question.

Known for building electronics components for everyone from Apple to Samsung, Foxconn is a giant of a company. Despite selling little in the way of first-party own-brand hardware, the company has the financial clout to pick up Sharp, one of Japan's oldest technology firms, in a deal valued at $4.3 billion. The company announced the deal (PDF warning) earlier today, but it would appear that Foxconn has developed a case of cold feet in the hours since.

According to a statement provided to the BBC, Foxconn has held off on signing the deal - despite letting Sharp believe it was going ahead - following the receipt of unspecified 'new material information' from the company. 'We will have to postpone any signing of a definitive agreement,' Foxconn's statement continued 'until we have arrived at a satisfactory understanding and resolution of the situation.'

Exactly what information has led to the hold-up is not yet known, but Sharp's shares have been taking a hammering since the announcement and are down by around 15 per cent. Previously, the Japanese government had been negotiating a deal whereby a consortium of local investors would acquire Sharp - and it's entirely possible that governmental desire to keep the company wholly Japanese is behind this last-minute hiccough.

Neither Sharp nor Foxconn have released details on the delay.
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