Foxconn Puts Sharp Takeover on Hold Over Undisclosed Liabilities
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Taiwan's Foxconn has put its takeover of Japanese electronics maker Sharp Corp on hold after becoming aware of previously undisclosed liabilities, two people with direct knowledge of the matter told Reuters on Thursday.
Loss-making Sharp said earlier in the day that it had agreed to be bought by Foxconn, a contract manufacturing firm, in what would be the biggest takeover by a foreign company in Japan's insular technology sector.
But Foxconn said hours later, in a separate statement, that it would not sign until it had clarified terms in a "new key document" from Sharp. It did not elaborate.
One of the sources, reading from details sent by Sharp to Foxconn, said the Japanese group had contingent liabilities that amount to "hundreds of billions of yen." That matter would have to be resolved before a deal can be finalised, said the source, who spoke on the condition of anonymity as the talks are confidential.
The source did not elaborate on the nature of the liabilities or the exact amount. Reuters has not seen a copy of the letter.
A spokesman for Foxconn, which is known formally as Hon Hai Precision Industry Co. Ltd., declined to comment on the issue. Sharp also declined to comment.
(Reporting by J.R. Wu in Taipei and Makiko Yamazaki in Tokyo; Editing by Edwina Gibbs and Clara Ferreira-Marques)