Hon Hai eyes majority stake in Sharp's LCD business

An advertising poster for Sharp's Aquos TV sets outside an electronics shop in Tokyo. Competition from cheaper Asian rivals has shrunk Sharp's market share for television sets.
An advertising poster for Sharp's Aquos TV sets outside an electronics shop in Tokyo. Competition from cheaper Asian rivals has shrunk Sharp's market share for television sets.PHOTO: REUTERS

TOKYO • Taiwan's Hon Hai Precision Industry is considering buying a majority stake in Sharp Corp's loss-making LCD business for up to 200 billion yen (S$2.4 billion), the Mainichi newspaper said yesterday, without citing any sources.

The Japanese paper said Hon Hai planned to ask iPhone maker and customer Apple, which is also a Sharp client, to invest a "few hundred million dollars" to help with funding the purchase.

Sharp declined to comment.

Hon Hai executives were not immediately available for comment. An official at the Japanese unit of Apple said no one was immediately available to comment.

Shares in Sharp closed the morning trade up 1.4 per cent, outperforming a 1.1 per cent fall in the benchmark Nikkei average .

The Nikkei business daily had last week reported that Hon Hai had offered to buy the entire LCD business, but it did specify how much the Taiwanese firm was willing to pay.

Osaka-based Sharp was once a highly profitable manufacturer of premium TV sets and screens, but competition from cheaper Asian rivals has shrunk its market share.

In May, Sharp sought a bailout of roughly US$1.9 billion (S$2.7 billion) from banks and promised to cut 10 per cent of its staff.

Tie-up talks between Hon Hai and Sharp fell through in 2012 after the Japanese company baulked at demands that it said would have given the Taiwanese firm too much control.

The two companies jointly operate a plant in Osaka that makes large LCD panels.

REUTERS

A version of this article appeared in the print edition of The Straits Times on September 29, 2015, with the headline 'Hon Hai eyes majority stake in Sharp's LCD business'. Print Edition | Subscribe