Foxconn Technology Group is to delay its proposed $6.2bn (£4.4bn) takeover of Sharp over concerns about the Japanese electronic giant’s future financial risk, reports have claimed.
The initial deal was agreed at a Sharp board meeting, and follows a long-running saga of whether the firm would select an offer from a domestic investment fund, or agree to be bought by Taiwan-based Foxconn’s parent Hon Hai Precision.
According to the Wall Street Journal, Sharp disclosed new details which revealed a list of about ¥350bn worth of "contingent liabilities" – or potential costs the company may face in the future based on the outcome of lawsuits, accounting changes, supply contracts or other uncertainties.
In its latest statement, Foxconn said: "We already notified Sharp on the same day that our side had to clarify the contents [in the list]. We have to postpone the signing before both sides can reach an agreement. We hope to clarify it quickly and bring the deal to a successful conclusion."
The deal is significant because it is the first time a Japanese technology company will fall into the hands of a foreign investor.
And it marked the end of a fortnight of Far Eastern acquisition action, with IT distribution giant Ingram Micro being acquired by HNA Group for $6bn earlier this month.
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