Hon Hai to ask Ap­ple to in­vest in Sharp LCD: re­port

The China Post - - LOCAL -

Tai­wan-based Hon Hai Pre­ci­sion In­dus­try Co. ( ), the world’s largest con­tract elec­tron­ics maker, is plan­ning to ask Ap­ple Inc. to jointly in­vest funds to buy a stake in Ja­pan- based Sharp’s liq­uid crys­tal dis­play busi­ness, ac­cord­ing to Ja­panese news­pa­per Mainichi Shim­bun.

The re­port said that talks on ac­qui­si­tion of a stake in Sharp’s LCD busi­ness be­tween Hon Hai and the Ja­panese firm have made a break­through, and the po­ten­tial Tai­wanese suitor is ex­pected to spend 200 bil­lion Ja­panese yen (US$1.67 bil­lion) to buy part of the busi­ness.

How­ever, the ac­qui­si­tion con­sid­er­a­tion is too high, the re­port said. Hon Hai, also known as Fox­conn Tech­nol­ogy Group ( ) out­side Tai­wan, is mulling the pos­si­bil­ity of hav­ing Ap­ple as a part­ner for the buy-out deal.

Ap­ple is one of Hon Hai’s most im­por­tant cus­tomers and ac­counts for more than 40 per­cent of the Tai­wanese man­u­fac­turer’s to­tal rev­enue each year. Both sides have built close busi­ness ties, with Hon Hai as­sem­bling iPhones and iPads for the U.S. con­sumer elec­tron­ics gi­ant.

Ac­cord­ing to the Mainichi Shim­bun, Hon Hai is con­sid­er­ing a re­quest to Ap­ple, in the hope that the U.S. busi­ness part­ner will in­vest a “few hun­dred mil­lion dol­lars” to help with fund­ing the pur­chase.

Hon Hai de­clined to com­ment on the re­port, although the pos­si­bil­ity of ac­quir­ing a stake in Sharp’s LCD oper­a­tions has at­tracted at­ten­tion from news media or­ga­ni­za­tions at home and abroad, in­clud­ing prom­i­nent Ja­panese news­pa­pers.

In a quar­terly earn­ings re­port end­ing at the end of June, Sharp said that it in­curred 33.98 bil­lion yen in losses, jump­ing from a loss of 1.79 bil­lion in losses recorded over the same pe­riod of last year.

Kozo Taka­hashi, pres­i­dent of fi­nan­cially strug­gling Sharp, said in March that he is open to any mea­sure that leads to a restruc­tur­ing of the com­pany’s LCD busi­ness, in­clud­ing the in­tro­duc­tion of strate­gic in­vestors.

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