Foxconn’s £4bn Sharp takeover in danger

Channel FinanceIT TrendsRetail

Deal could see future iPhones get better screens, but doubts have already been raised following release of ‘new information’

Sharp is said to be close to confirming a takeover deal with Foxconn in a move that could spell a big shake-up for future Apple devices.

The Taiwanese firm, which is heavily involved in the production of Apple’s iPhone and iPad products, will pay around 650 billion yen (£4.1bn) to acquire the Japanese company, having made an initial bid last month.

If successful, the partnership could see Sharp begin mass-producing high quality OLED screens for mobile devices over the next few years, with Apple expected to adopt this technology by 2018.

Sharp_Head_OfficeSharp has previously been given a deadline to the end of Q1 2016 to decide upon Foxconn’s bid, which has seen the Japanese company issue around $4.4bn (£3.98 billion) worth of new shares to Foxconn.

However, the deal has already been thrown into doubt this morning following the apparent revelation of “new information” surrounding the deal.

Bloomberg’s Peter Hoskins reported on Twitter earlier today that Foxconn was set to postpone any signing of a “definitive agreement” with Sharp as it was reviewing “new material information” it had received.

This could be related to Sharp’s financial struggles, as the company lost 222 billion yen (£1.34bn) last year despite major job cuts, and has been bailed out by banks several times.

foxconn-185x105The deal could also face significant opposition from the Japanese government itself, which is thought to be unwilling to let Sharp fall into foreign ownership, especially given Foxconn’s links with partners such as Apple.

Government and Sharp officials initially backed a rescue plan by state-backed Innovation Network Corp of Japan (INCJ), which had planned to merge Sharp’s screen business with Japan Display in an effort to keep home-grown innovation within Japan.

Read also :