Japanese electronics maker Sharp has been on the decline for some time and earlier this week announced that it had accepted a 700 billion yen (£4.4 billion) takeover offer from Taiwan's Hon Hai Precision Industry.
However, today it has emerged that Precision Industry - also known as Foxconn - has stalled on the deal after issuing a statement saying that “new material information” had been received.
The statement said: “We have accordingly informed Sharp last night that we will have to postpone any signing of a definitive agreement until we have arrived at a satisfactory understanding and resolution of the situation,”
Inside sources said that the new information concerns new details on Sharp's financial position, but that Terry Gou - the founder of Hon Hai Precision Industry - still intends to see the deal through.
Foxconn's £4.4 billion offer would make it the fourth largest foreign acquisition of a Japanese company if it were to go through, according to stats from Dealogic. The largest ever deal is the $13.9 billion (£9.9bn) puchase of Nikko Cordial by Citigroup in 2007, followed by General Electric's $6.9 billion (£4.9bn) acquisition of Japan Leasing in 1999 and the $6.5 billion (£4.6bn) takeover of Japan Telecom by Vodafone in 2001.
“This deal indicates that Japan is closer on the path of abandoning the notion that they need to keep a company totally domestic just because it has a famous Japanese name and good technology,” said corporate governance expert and head of The Board Director Training Institute of Japan Nicholas Benes.
“In a global world, this is an outmoded concept.”