Sharp and Foxconn deal has all but fallen apart

By , Feb 25, 2013

Sharp's logo is seen at an electronic shop in Tokyo

For a year now, we’ve been hearing that Foxconn was going to buy a large stake in Sharp Corp. Speculation of the deal has run rampant, going so far as to implicate that the partnership was part of Apple’s plans to build a TV.

But over the last several months, Sharp’s business has started to falter, causing Foxconn to rethink things. Since then, the companies haven’t been able to come to an agreement. And according to a new report, they won’t…

Bloomberg reports:

“Sharp Corp. (6753)’s talks with Taiwan’s Foxconn Technology Group over an investment in the Japanese electronics maker will probably end March 26 without an agreement, two people familiar with the discussions said.

Negotiations haven’t led to a deal partly because the companies can’t agree on a price after Sharp’s shares declined, said one of the people, both of whom asked not to be named because the talks are private. The maker of Aquos televisions fell the most in two months today, the biggest decline among companies in the Tokyo Stock Exchange’s first section.”

It’s no surprise that the two sides haven’t inked a deal yet. As anyone who watches Shark Tank knows, investors don’t ever like to pay more for a company than they think it’s worth, and companies hate to be undervalued.

And right now, it’s tough to put a firm value on Sharp’s business. At the moment, the company is trying to raise funds as it forecasts a record full-year loss of 450 billion yen ($4.8 billion). But it does have one major asset.

It’s IGZO (Indium gallium zinc oxide) panels have garnered a lot of attention lately. And because they’re thinner, and require far less power than typical panels, they’re constantly brought up in new Apple product rumors.

In fact, Sharp and Apple have been mentioned a number of times in the same breath, which is what makes this Foxconn deal so interesting. Whether it goes through, or falls through, it’s going to have a huge impact on the mobile industry.

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  • http://www.facebook.com/jordan.miller.370 Jordan Miller

    Yeah this made me sick today. Today is a day I wish I wasn’t a shareholder. Down 37 :'(