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Reported Foxconn investment in Sharp stalls

Foxconn has reportedly dropped plans to invest in Sharp for now, though the manufacturer may revisit the idea later on, according to Reuters.

Foxconn, also known as Hon Hai Precision Industry, had planned to buy an almost 10 per cent stake in the device manufacturer. But the companies will not sign on the dotted line by a 26 March deadline. Reuters cited Asian newspaper Asahi, which said talks between the two firms stalled in part because Sharp didn't want to hand over management control to Foxconn and because of Sharp's dropping stock prices.

According to the news wire, Foxconn Chairman Terry Gou this week met with Sharp bankers to announce that there will be no deal this month, but Foxconn will consider it again after Sharp creates a new business plan.

Neither Foxconn nor Sharp immediately responded to requests for comment, but spokespeople for both companies told Reuters that they will continue to negotiate until the deadline.

Foxconn, a major supplier for Apple, spent much of 2012 under scrutiny for the poor working conditions at its mainland China factories. Apple commissioned the Fair Labor Association (FLA) to investigate, which found overtime and other abuses. By August, however, the FLA said Foxconn was making progress in improving conditions in China.

It's not all gloomy for Sharp, though, which on Wednesday announced that Samsung is investing $112 million (£75 million) for a three per cent stake in the struggling Japanese company. As reported by the LA Times, Samsung will snag almost 36 million shares at a price of about $3.11 (£2), in an attempt to better compete with Apple. The deal, expected to be complete by 28 March, will provide Samsung with Sharp-built TV and mobile device screens.

Sharp also inked a $120 million (£80 million) investment deal with Qualcomm in December, Reuters pointed out - another attempt to raise money to repay a $2.1 billion (£1.4 billion) convertible bond due this fall.