Sharp contrast

6 March 2013 By Peter Thal Larsen Follow @Peter_TL

The Korean giant is investing $111 mln in its cash-strapped Japanese rival. In return it gets a 3 pct stake and locks in a supplier of liquid crystal displays. The vote of confidence is important for Sharp. But with $11 bln of net debt, it needs more fresh equity to pull through.

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Sharp has struck a deal with Samsung in which the Korean group will invest 10.4 billion yen in the ailing Japanese electronics firm.
Sharp supplies liquid crystal display panels to Samsung. Sharp said the March 6 agreement would strengthen existing links. It added that the deal would “continuously provide a long-term, stable and timely supply of LCD panels” for televisions and notebook computers.
Samsung will buy 35.8 million Sharp shares at a price of 290 yen per share, giving it a stake of 3.08 percent.
In December, U.S. group Qualcomm agreed to invest approximately 10 billion yen in Sharp shares in two tranches. In March 2012, Hon Hai, the Taiwanese group that assembles many of Apple’s products, announced the outlines of a deal to invest 66.9 billion yen in Sharp. However, that agreement has not yet been completed.
At close of business in Tokyo shares stood at 341 yen, up 14 percent.

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