By Reiji Murai
TOKYO (Reuters) - Japan's Sharp Corp is in talks with Taiwan's Hon Hai Precision Industry Co for a tie-up in its struggling flat-panel display business, according to two sources familiar with the discussion.
Under the proposed plan, Sharp would spin of the display business into a separate unit ahead of investment from Hon Hai and possible cash injections from other entities, including the state-directed Innovation Network Corporation of Japan, the sources said.
The talks come after Sharp's chief executive, Kozo Takahashi, last month said he was open to major restructuring of Sharp's liquid crystal display (LCD) and consumer electronics businesses as investors and analysts clamored for an overhaul.
Earlier tie-up talks between Hon Hai and Sharp fell through in 2012 after the Japanese company balked at demands that it said would have given the Taiwanese firm too much control. The two corporations, nonetheless, remained in contact and jointly operate an plant in Osaka Western Japan that makes large LCD panels.
(Writing by Tim Kelly; Editing by Nick Macfie)