Electronics maker Sharp has announced that Korean technology giant Samsung has invested $110 million in the company, effectively giving Samsung a three percent stake in Sharp and making it the biggest individual shareholder in Sharp that isn’t a financial institution.
“Sharp has decided to issue new shares through a third-party allotment to Samsung Electronics, and form a capital alliance with Samsung Electronics Japan,” Sharp said in a statement. “Sharp will receive capital investment of approximately 10.4-billion yen from Samsung Electronics and will issue new shares to the equivalent of 3.08% of the voting rights after such capital investment,” they continued.
In terms of the agreement, the cash injection will be used by Sharp to improve its TV and smartphone panel production, while Samsung will have access to Sharp’s LCD supply.
“Rather than the amount of investment, it is the partnership with Samsung that Sharp gains that is important. Sharp has an opportunity to use the Samsung platform,” said Tetsuro Ii, chief executive officer of Commons AM, a Tokyo based investment fund.
“Sharp has been in discussions with Taiwan’s Hon Hai Precision to form a partnership to produce LCD panels, but talks stalled following a major dip in Sharp’s share price. Nikkei reports that the deadline for Sharp to seal the Hon Hai deal is due to expire on the 26th of this month, and that the Samsung deal will serve to vouch for Sharp’s viability as a business. In December, Qualcomm invested a similar $120 million in the company,” The Verge wrote.
Charlie Fripp – Consumer Tech editor