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Foxconn puts Sharp buyout on hold to investigate future financial risk

Last month reports surfaced suggesting that Foxconn was in talks to acquire the display maker, Sharp. This acquisition would open up some additional doors with Apple, allowing the iPhone assembly factory to also supply displays for the phone. However, the acquisition deal has apparently been put on hold as new details have come to light regarding Sharp’s financial position.

According to a report from The Wall Street Journal, Foxconn has heard that Sharp may be carrying $3.1 billion in debt, which Foxconn would then be responsible for should it buy the display maker.

sharp-logo

Image Source: BGR

If this turns out to be true, then Foxconn may simply just not be in the financial position where it can take on Sharp and pay off its debts, which could cause the deal to crash and burn. Foxconn was initially planning to shell out $5.3 billion for the company according to previous reports.

That’s all we know for now but we will probably hear more in the coming weeks/months.

KitGuru Says: Sharp isn’t in a great position financially as it is but it sounds like things could be worse than anticipated. It will be interesting to see how this affects the deal going forward. 

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