Deja vu? The Foxconn acquisition of Sharp was almost a done deal a few weeks ago, until Sharp revealed some additional liabilities at the eleventh hour it had not previously disclosed. This meant Foxconn had to go back to the drawing board and re-assess the deal, renegotiating some parts of the contract with Sharp. The initial offer was worth $6.2 billion. Today, the companies announced Foxconn will buy Sharp in a $3.5 billion dollar deal.
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Update: The WSJ reports that the deal is not yet certain. Sharp may come with some potential financial risks, which Foxconn is evaluating before it actually signs the deal.
Foxconn Technology Group said Thursday it is delaying the signing of a definitive takeover agreement with Sharp Corp. due to new details that the Japanese electronics maker disclosed a day earlier.
Foxconn didn’t elaborate in its statement, but people familiar with the matter said that the Taiwanese iPhone assembler is putting the Sharp deal on hold after reviewing the Japanese firm’s future financial risk. The people said Foxconn received a list of about ¥350 billion yen worth of “contingent liabilities” from Sharp on Wednesday.
Contingent liabilities are costs that a company might face in the future, based on the outcome of lawsuits, accounting changes, supply contracts or other uncertainties.
Last month it was reported that Apple manufacturer Foxconn had bid $5.3 billion to acquire Japanese display maker Sharp, who has faced numerous financial and manufacturing difficulties over recent years. Now, Japanese news outlet Nikkei Asian Review reports that Sharp has accepted an offer from Taiwan’s Hon Hai Precision Industry, better known as Foxconn, for $6.2 billion.