Sharp announces share sale to Samsung

SHARP has announced a Y10.4 billion ($A109 million) deal with South Korean rival Samsung.

In a rare move for a Japanese firm, it will sell a three per cent stake to the South Korean company.

The deal, announced after the markets closed on Wednesday, will make Samsung Sharp's biggest foreign shareholder.

Early reports of the deal sent Sharp shares soaring more than 17 per cent in early trade before ending 14.04 per cent higher. Samsung was up 0.65 per cent.

The Japanese firm said the deal would help shore up its troubled finances while boosting "mutual trust" as the firms look to benefit from Sharp's leading liquid-crystal display technology for mobile phones and tablets.

Samsung said the investment "would lay a firm foundation to secure a steady supply of LCD panels from diversified sources".

Sharp, which has announced a separate 4.94 billion yen capital injection deal by US chipmaker Qualcomm, is also a major panel supplier to Samsung rival Apple.

The decision to accept a capital injection from a foreign firm marks a major comedown for both Sharp and Japan's manufacturers, said Hiroshi Sakai, chief economist with SMBC Friend Research Centre.

"For Japan, it is symbolic and shocking news, as Sharp, which used to be a frontrunner in the panel industry, is struggling while its rival Samsung has raced past it," he said.

He added that the news "should not be any surprise" given Samsung's leading position in the global electronics market.

The deal will not solve all of Sharp's woes, he added, as the firm cuts jobs and overhauls its business after saying in February its loss in the nine months to December had doubled to about $US4.6 billion.

Given the sector's struggles, deals between Japanese and foreign rivals are likely to increase, Sakai said.

"Many other Japanese electronics makers are struggling to survive. But they still have attractive technologies and some foreign rivals are quite interested in them," he said.

Sharp - which last year put up its Osaka headquarters as collateral to clinch crucial bank loans - has been hammered by lower-cost rivals in its liquid-crystal display business.

Rival Sony, meanwhile, is selling off its headquarters in Manhattan and a major building in Tokyo to raise cash, while Panasonic is undergoing a similar painful restructuring after losing about $US6.77 billion in the nine months to December.

The Samsung-Sharp deal gives the South Korean company more access to the market without investing in new production plants, analysts said.

Anda sedang membaca artikel tentang

Sharp announces share sale to Samsung

Dengan url

http://writerlovery.blogspot.com/2013/03/sharp-announces-share-sale-to-samsung.html

Writer Lover