Hon Hai considering buying $1.7 billion stake in Sharp LCD unit: paper

Reuters News
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Posted: Sep 27, 2015 11:13 PM

TOKYO (Reuters) - Taiwan's Hon Hai Precision Industry Co is considering buying a majority stake in Sharp Corp's loss-making LCD business for up to 200 billion yen ($1.7 billion), Japan's Mainichi newspaper said on Monday, without citing any sources.

The newspaper said Hon Hai planned to ask iPhone maker and customer Apple Inc, which is also a client of Sharp, to invest a "few hundred million dollars" to help with funding the purchase.

Sharp declined to comment. Hon Hai executives were not immediately available for comment. An official at the Japanese unit of Apple said no one was immediately available to comment.

Shares in Sharp closed morning trade up 1.4 percent, outperforming a 1.1 percent fall in the benchmark Nikkei average.

The Nikkei business daily had last week reported that Hon Hai had offered to buy the entire LCD business, but it did specify how much Hon Hai was willing to pay.

Osaka-based Sharp was once a highly profitable manufacturer of premium TVs and screens, but competition from cheaper Asian rivals has shrunk its market share.

In May, Sharp sought a bailout of roughly $1.9 billion from banks and promised to cut 10 percent of its staff.

Tie-up talks between Hon Hai and Sharp fell through in 2012 after the Japanese company baulked at demands that it said would have given the Taiwanese firm too much control. The two companies jointly operate a plant in Osaka that makes large LCD panels.

($1 = 120.3600 yen)

(Reporting by Makiko Yamazaki; Writing by Chang-Ran Kim; Editing by Miral Fahmy)