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Sharp Acquisition Deal Placed On Hold By Foxconn Due To Possible Financial Risks In The Future

Foxconn which is the manufacturer for Apple iPhones is on the verge of acquiring Sharp. As per the reports, the deal is yet to be confirmed. Due to the fact that the acquisition of the company may also come with various kinds of financial risks, the company is presently evaluating all the pros and cons before they finalize with the deal.

Sharp Acquisition Deal Placed On Hold By Foxconn Due To Possible Financial Risks In The Future

On Thursday, Foxconn Technology Group stated that they delay for the completion of the agreement made for the acquisition is right now delayed due to the fact that there have been some latest details that have been disclosed just before the deal could be signed.

Though the statement was not elaborated by the company, the people who are a part of the matter stated that the iPhone assembler has put the a hold on the deal so that it can get some time to review the financial risks it may incur in the future. It is said that the company received a list of contingent liabilities which were valued at around 350 billion yen on Wednesday from Sharp.

Based on the list of liabilities, this can result in various kinds of lawsuits, changes in accounting, contracts for supply as well as different kinds of uncertainties.

Foxconn had made a bid of around $5.1 billion so that they could go ahead and purchase the company. The was an eagerness to buy the company as this way it could generate more revenue from the assembling of phones especially from its biggest and important client Apple.inc.

While it can be really expensive to assemble LCD screens, by buying Sharp, the company can get a better share on the bills that will be used for the materials that are used for iPhones and various other devices. It is said that even Apple can benefit from this deal since it can help reduce the cost of buying the components from outside.

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