Hisense has acquired Sharp's television business units in the US, giving the Chinese firm full control over the TV business across the region.
Announced on Friday, Hisense and Sharp America said Chinese TV manufacturer Hisense will pay $23.7 million for the full ownership of "equity and assets" relating to Sharp's television production facility in Mexico.
In addition, the Chinese firm has gained the rights to use the Sharp brand name in both the North and South American regions.
"This acquisition will have Hisense completely taking over Sharp's TV business in these regions," Hisense said. "The acquisition will help Hisense gain an upper hand in both North and South America with the extended market capacity."
Hisense manufactures white goods, appliances, television sets and mobile devices for distribution internationally. While the company is little-known outside of China, the deal will give Hisense the opportunity to take on rival firms such as LG and Samsung in the US market.
Sharp said the decision to license its television business to Qingdao-based Hisense is the result of restructuring efforts.
The firm reported steep losses of $274 million in the April to June financial quarter due to weak sales, which is only the latest in a string of disappointing financial results. Sharp reported a net loss of ¥222 billion across 2014.
In order to salvage Sharp's future, the Osaka, Japan-based firm is pushing ahead with a relentless restructuring plan which includes selling off non-essential units and assets, as well as bringing down the axe on thousands of jobs. In March, the company launched an early retirement program, of which approximately 3,500 employees are predicted to take up.
In a statement (.PDF), Sharp said:
"Since entering the North American LCD television market in 2001, Sharp Group has expanded its lineup of LCD televisions by increasing their size and introduced products with special features such as the AQUOS Quattron televisions using four primary colors, and has both created the LCD television market and led the expansion of this market.
In recent years, however, Sharp has not been able to fully adapt to the intensifying market competition, which led to significantly lower profits compared to the initial projections for the previous fiscal year, and has been suffering from poor earnings performance."
The shift in business is expected to be complete by January 2016. As a result, Sharp has warned shareholders that the necessary, heavy financial losses will be incurred on or after the first quarter of the fiscal year ending March 2016.
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