Sharp-Foxconn Investment Talks Could End Without Deal in March
By Prasanth Aby Thomas | February 23, 2013 9:06 PM EST
Japanese electronics major Sharp Corp's investment negotiations with the Taiwanese firm Foxconn Technology Group could conclude by March-end without a deal, reports Bloomberg, citing unnamed sources.
The two companies have not been able to strike a deal due to differences on the price after a decline in Sharp's stocks, management control and company strategy. In November the Japanese company had said that the negotiations could extend beyond March.
Sharp is Japan's biggest liquid crystal display maker, but it has struggled lately due to the slump in TV and LCD panel demand. The company, which predicts a full-year loss of 450 billion yen ($4.8 billion), is now seeking to raise funds.
Foxconn, which is popularly known as the manufacturer of iPhone for Apple, had earlier consented to take over 9.9 percent stake in the Japanese firm for 550 yen per share. But the deal ran into trouble as Sharp's stocks tumbled for seven consecutive months, touching as less as 143 yen and Foxconn wanted to reconsider the price.
According to an earlier report from the Japanese newspaper Mainichi cited by Bloomberg, Sharp could halt the negotiations. Another newspaper Sankei had said that the electronics firm is even looking at options such as public stock sales to collect about 200bn yen.
Sharp has not confirmed any of the reports, indicating that no decision on the matter has yet been taken. A Foxconn spokesman told Bloomberg that the discussions are continuing and that they are not bound by any time table.
In June, a Foxconn official had said that some of Sharp's board members were against the deal, as they feared the Japanese company would become a part of Foxconn. Sharp is negotiating share sale deals with other firms as well.
The two companies are expected to continue talks on other modes of cooperation and Sharp could consider further sales of its factories to Foxconn, the Bloomberg report added. In July, the Japanese firm had sold a stake in an LCD plant in central Japan, to Foxconn.
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