Samsung doles out US$112m for 3% stake in Sharp

Sharp has confirmed that it has agreed to a deal which will see South Korean electronics giant Samsung pay US$112-million for a three percent stake in it.

According to the Japanese multi-national, the purpose of the deal is to strengthen an alliance between the two companies, relating specifically to their LCD business as well as to “enhance Sharp’s capital adequacy”.

Sharp has been supplying Samsung with LCD displays for some time now, but the new deal will see it commit to providing LCD panels for large TVs, as well as small and medium-sized LCDs for mobile devices.

The deal, alongside others with the likes of chipmaker Qualcomm, is part of a large-scale restructuring by Sharp as it looks to recover from a steep decline in its fortunes.

As The Next Web notes, another deal that is yet to be confirmed involves Hon Hai, the parent company of manufacturing giant Foxconn.

The deal would apparently see Hon Hai take a 10% stake in the company. Time is fast running out on the deal however, so it’s possible that it won’t actually go through.

The central irony in the deal with Samsung is that the Korean manufacturer, along with the likes of LG, has been partially responsible for the decline of Sharp and other Japanese electronics giants like Sony.

The latter has been forced to sell buildings in New York and Tokyo and cash out its stakes in medical company M2 and mobile games specialist DeNA in a bid to stay afloat.

Image: Otsu4 via Wikimedia Commons