Foxconn delays signing £3bn deal to buy Sharp

Taiwanese technology manufacturer Foxconn has delayed the signing of a $4.3bn (£3.08bn) agreement to take over Japanese electronics giant Sharp.

According to sources quoted in The Wall Street Journal, the deal had been put on hold due to iPhone assembler Foxconn’s concerns over a list of about ¥350 billion (£2.3bn) worth of “contingent liabilities” that Sharp had disclosed.

Contingent liabilities are costs that a company might face in the future, based on the outcome of lawsuits, accounting changes, supply contracts, product warranties or other such uncertainties.

The takeover had been announced by Sharp earlier today [February 25], after the company’s board concluded a meeting to discuss rival offers.

However, according to The Wall Street Journal, sources said Foxconn is reviewing the 100-item list and the company hasn’t given up on the deal.

“We already notified Sharp on the same day [before Sharp held its board meeting on Thursday] that our side had to clarify the contents,” Foxconn said in its statement. “We have to postpone the signing before both sides can reach an agreement. We hope to clarify it quickly and to bring this deal to a successful conclusion.”

Sharp declined to comment on Foxconn’s statement.

According to a report by the BBC, Japanese officials had been reluctant to let Sharp fall under foreign ownership because of its distinctive display panel technology.

Founded in 1912, Sharp is one of Japan’s oldest technology companies. It has struggled with heavy debts in recent years, but has continued to be at the forefront of liquid crystal display technology – a key asset for Foxconn.

Taiwanese firm Foxconn assembles most of the world’s iPhones.