Samsung Announced to Buy Shares in Sharp CorporationMarch 20, 2013 No Comments
Featured in an article in JapanTimes, Sharp had announced that Samsung Electronics, the South Korean technology giant firm will invest a total of ¥10.4 billion (approximately $108.3 million), giving Sharp the “embattled Japanese firm a needed cash lifeline”. In the said agreement, Sharp had sold a 3 percent stake to its Asian rival, Samsung, by issuing new shares later this month. This means that Samsung will become the the largest foreign shareholder of the Japanese Corporation and the fifth largest overall.
“This capital alliance will enable Sharp to secure its source of revenue from (the) LCD business forming the company’s core,” Sharp said in a statement. “Sharp will certainly position its business for growth by continuously accelerating implementation of its business restructuring to realize a ‘recovery of business performance and credibility,’” it added.
According to the same article, the deal between Samsung and Sharp “could put to rest growing concerns about Sharp’s health, as tieup talks with Taiwanese business partner Hon Hai Precision Industry Co., better known as Foxconn, have stalled.”
Premonition or not, Sharp’s stock surged on the news, finishing Wednesday 14.05 percent higher at ¥341 on the Tokyo Stock Exchange, is perhaps a sign that the two partnership may go a long way down the road.
Other details of the agreement revolved around these subjects as quoted from the article written in Japan Times by Hiroko Nakata:
“The company, which currently supplies Samsung with LCD panels, will further boost the alliance, providing a long-term supply of LCD panels for large TVs as well as those for small and medium-size LCD panels used in mobile devices such as notebook computers, it said.
The struggling Osaka-based electronics firm had aggressively invested in large LCD and solar panels, only to see demand weaken and prices plummet as a result of fierce competition with Samsung and other South Korean and Chinese firms.
The deal could prove a boon for LCD panel production, particularly at Sharp’s Kameyama plant in Mie Prefecture, which also manufactures the panels for Apple’s iPhones. Sharp could also supply Samsung with IGZO-based displays, which have low power consumption and high performance, for mobile terminals.”
- Samsung to buy 3% stake in rival Sharp, Japan Times by Hiroko Nakata
Sharp like Samsung does not only compete in the electronics industry, both are also manufacturers and providers of printing equipment and printer supplies.