Foxconn and Sharp Bosses to Meet After Stalled Takeover

Photo of author

By Jacob Maslow

Terry Gou and Kozo Takahashi, chief executives of Foxconn and Sharp Corp, will meet in China on Friday a day after Apple’s iPhone assembler put its takeover of the Japanese liquid crystal display manufacturer on hold.

Shares in Sharp plunged 11% on Friday after previously undisclosed liabilities were cited as the reason for the last-minute postponement.

Sharp, on Thursday, announced that it had agreed to sell a two-thirds stake to Taiwanese firm Foxconn. But merely hours later, the Taiwanese firm said it would not commit to the deal until it had examined the set of new documents provided by Sharp.

Sources cited by Reuters said the Japanese manufacturer had contingent liabilities of approximately 300 billion yen ($2.7 billion), that was only disclosed on Wednesday.

Sharp said, in a statement released on Friday, that the company has been disclosing its contingent liabilities properly.

The drop in Sharp shares added to losses on Thursday that came as planned share dilution under the takeover deal appeared larger than expected. Sharp’s stock has lost nearly 25% of its value over the last two days.

Foxconn’s shares, meanwhile, remained steady on Friday, inching down just 0.6%.

The Taiwanese firm’s takeover of the Japanese display maker is seen by analysts as a strategic move for Foxconn to boost its stronghold as Apple’s main contract manufacturer. Sharp provides display screens to Apple, while Foxconn assembles Apple’s iPhones.

Foxconn’s takeover of Sharp would provide the necessary capital to enable the company to develop and mass produce organic light-emitting diode (OLED) display screens by 2018, which is around the same time Apple is expected to adopt the technology for its popular smartphones.

Images Courtesy of DepositPhotos