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Hon Hai mulling 100 billion yen investment in Sharp: report

Hon Hai mulling 100 billion yen investment in Sharp: report

Tokyo, April 3 (CNA) Taiwan-based Hon Hai Precision Industry Co., which assembles iPhones and iPads for Apple Inc., is mulling an investment of about 100 billion Japanese yen (US$835.5 million) in electronics maker Sharp Corp., the Sankei Shimbun reported on Friday. The investment would be made to support the Japanese company as it undergoes a global restructuring in return for a role in the company's operations and access to the company's technological know-how, according to the report. Hon Hai, which is hoping to buy the stake through a third-party allotment of new share, would end up with a roughly 20 percent stake in Sharp, should the deal be made. Sharp currently has a market capitalization of 400 billion yen. The report said Hon Hai may have already expressed its intentions to the Japanese company, but Sharp, which supplies Hon Hai with smartphone panels, said it was not aware of any offer having been made. The Japanese company is considering asking banks for 150 billion yen to help fund its restructuring efforts, the report said. It would not be the first time that Hon Hai, the world's largest contract electronics maker, has wooed the financially troubled Japanese company. Hon Hai agreed in March 2012 to buy a 9.9 percent stake in Sharp for 66.9 billion yen, but the deal fell apart in 2013 after a weak earnings reports sent Sharp shares into a tailspin. The negotiations also broke down after Sharp rejected Hon Hai Chairman Terry Gou's request to have a say in the company's management. In July 2012, however, Gou in a personal capacity acquired a 50 percent stake in Sharp's advanced display panel plant in Sakai, a city in Osaka Prefecture, for 66 billion yen. The flat panel plant was seen as a major cause of Sharp's financial woes, but it became profitable in 2013 after Gou got involved and remained profitable in 2014, according to Hon Hai. (By Yang Ming-chu and Scully Hsiao)


Updated : 2021-09-28 07:55 GMT+08:00