Samsung has just bought a 3.08% stake in Sharp, the ailing Japanese corporation that makes highly coveted LCD screens for everything from TVs to phones. This has cost Samsung around $111 million. And while 3% hardly sounds like a lot, this makes Samsung Sharp’s biggest shareholder that isn’t a financial institution, and the fifth biggest overall. However, the Korean company gets no say in Sharp’s management and strategic decisions.
Sharp obviously is in a position where it desperately needed the money. The company’s rating is now ‘junk’ which means it can hardly borrow money from financial institutions. So it’s been doing this type of industry deals, first with Qualcomm (which now owns 2.56% of Sharp), and now with Samsung.
But the elephant in the room is the Hon Hai Group, known as Foxconn. Apple’s manufacturing partner has been having talks with Sharp about a big investment for more than a year now. At one point last March it was pretty much a given that Foxconn would become Sharp’s biggest shareholder, after a $1.6 billion investment. Yet that hasn’t happened yet, and the deadline for closing that deal is the end of this month. So maybe Samsung’s involvement will help Sharp convince Foxconn to finally do it.
Samsung is already a Sharp customer, but after this deal it will strengthen its cooperation with the Japanese company, buying especially TV screens, but also displays for laptops and mobile devices.
Your move, Foxconn.
If you liked the post, you might find these interesting too:
- Foxconn knew about Samsung’s plan to invest in Sharp. Foxconn-Samsung partnership in the making?
- Foxconn becomes biggest Sharp shareholder. Eyes mobile for global dominance
- Sharp is promising 3D smartphone by the end of the year
- Sharp to move its phone and tablet display tech to a Foxconn plant in China
- Apple to buy $11B worth of parts from Samsung in 2012. Up from $7.8B last year