Osaka-based Sharp Corp., a subsidiary of Taiwan-based manufacturing giant Hon Hai Precision Industry Co., said Friday that it will take full control of Sakai Display Products Corp. (SDP) through a stock swap.
In a statement, Sharp's chairman and chief executive officer J.W. Tai (???) said the company reached an agreement with SDP's major shareholder World Praise Ltd. (WPL) to bring SDP completely under its corporate umbrella, pending regulatory approval.
Tai said the move by Sharp, which currently owns a roughly 20 percent stake in SDP, to make the flat panel maker a wholly owned subsidiary will help make Sharp's flat panel business in the global market more competitive.
A key factor in the deal, Tai said, was that it will give Sharp priority rights to screen supplies from SPD's partially owned advanced 8.5 generation plant in Guangzhou, which produces 55, 65 and 75-inch flat displays for TV production.
In a statement, Sharp said the move took into consideration the need for a stable supply of high quality panels to achieve Sharp's goal of expanding its global large-size TV and professional display businesses as global demand grows.
Friday's announcement came after Sharp's board at a meeting in February approved a plan to acquire the remaining 80 percent of SDP shares.
Under the agreement with WPL, Sharp will use 11.45 common shares of the company in exchange for one SDP share to completely own the flat panel maker.
To meet demand for the stock swap, Sharp will issue about 38.45 million new common shares, the Osaka company said.
Because the stock swap deal is still subject to regulatory approval, no timetable has been set for the completion of the transaction, Sharp said.
According to Sharp, SDP, also headquartered in Osaka, has 32.49 billion Japanese yen (US$282 million) in capital and about 4.2 million shares in circulation.
At present, Leroy Yau (???), the major investor of WPL, serves as the chairman of SDP, Sharp said.
As of the end of June 2021, SDP had a workforce of 1,150 and its major clients included Samsung Electronics Corp. and LG Corp. of South Korea.
In 2020, SDP posted a net loss of 101.99 billion yen, bringing aggregate losses from 2018 to 2020 to 150.11 billion yen.
Source: Focus Taiwan News Channel