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Home >> Qualcomm To Take Stake In Sharp
Tokyo – Qualcomm said Tuesday it will invest $120 million in Sharp Electronics to help keep the struggling big-screen LCD TV manufacturer alive, after it sent out warnings last month.
In a statement, Sharp said it will sell 30.12 million shares to Qualcomm this month. It will issue 4.9 billion yen ($59.7 million) worth of new shares to the firm at a discounted 164 yen a share.
After market close, Sharp said and it may issue another 4.94 billion yen of stock to the San Diego-based company if certain conditions are met.
Following the deal, Qualcomm is expected to become one of Sharp’s largest shareholders, with a 2.65 percent stake, according to a Reuters report.
In statements Tuesday, the companies said they plan to develop LCDs based on a Sharp’s new energy-efficient IGZO technology, offering a host of benefits including more sensitive touch-screen functionality and sharper images.
Sharp needed the cash infusion following heavy losses in its flat-panel business, brought on by compressing profit margins, stronger competitors in Korea, China and Taiwan, and weaker global TV demand in the difficult economy.
Sharp had previously announced that it was to accept a 67 billion yen investment from Taiwan’s Foxconn Technology, but the deal was renegotiated after Sharp’s financial picture and stock price continued to decline.
In the interim, Sharp has implemented major cutbacks, and announced last month “material doubt” over its ability to survive without making partnerships, after forecasting a record 450 billion yen loss for the year through March.
In recent weeks, potential investors including Dell, Intel, Hewlett-Packard, Microsoft, Google and Apple, have been rumored to be looking at the deal.
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