Samsung's bid for Sharp to rival Foxconn: Report

In an interesting twist, Samsung bid multiple times to buy debt-ridden Japanese display maker Sharp, along with bids from Foxconn and a Japanese state-fund, Japanese media has reported.
Written by Cho Mu-Hyun, Contributing Writer

South Korean tech conglomerate Samsung has offered to buy troubled Japanese electronics giant Sharp "multiple times", which may affect the final takeover decision, Japanese media Nikkei has reported.

Earlier this month, local media reported that Sharp was leaning towards accepting Foxconn's $5 billion acquisition deal over state-fund Network Corp of Japan.

But last October, Samsung Electronics vice chairman Lee Jae-yong met an unnamed chief executive of a large Japanese financial institute in Seoul and told him that the South Korean tech conglomerate "wants to support Sharp", the report claims, although many in Japan, including the government, questioned Samsung's "sincerity".

The unnamed executive reportedly said he felt that the vice chairman had a "genuine interest in Sharp".

In December, Samsung reportedly sent a notice to Sharp saying that it was interested in acquiring the Japanese tech giant's factory in Sakai and wanted to review assets early this year. The Sakai factory produces liquid crystal displays for TVs and is owned by both Sharp and Hon Hai Precision, each with a 38 percent stake. Samsung wanted Sharp's stake, the report says.

Sharp has sold most of its buildings and factories -- including its headquarters in Osaka -- meaning the Sakai factory, which is worth 70 billion yen, is one of its last key assets. An unnamed Sharp senior executive told Nikkei that Samsung has shown interest in the factory since 2013, but the Japanese company was unable to make a decision because it was a joint venture with Foxconn.

Samsung, the world's largest TV shipper, buys large display panels from Sharp that are produced at the Sakai factory. It is one of the few valuable factories that can produce high-quality large TV panels, and for Samsung, acquiring it would be cheaper than building a new factory, Nikkei claimed.

Samsung bought a stake of Sharp for $111 million back in 2013 -- negotiations that were also led by the vice chairman. The South Korean tech giant wanted Sharp's printer business as part of the deal but was denied by the Japanese government.

Hon Hai itself may offer Samsung a stake in the factory, an unnamed Japanese executive working for the Taiwanese conglomerate told Nikkei. Foxconn and Sharp are all part of Apple's production pyramid, but the company recently announced that it will lower production volume of the iPhone 6 series by 30 percent. Getting friendly with Samsung, and supplying them with more displays, may be a safer choice for Foxconn, the report says.

Sharp is expected to hold a board meeting on Wednesday regarding the offer. If a conclusion is not reached, they will hold an extra board meeting the following day to finalise the deal. The negotiation deadline with Foxconn is February 29.

A Samsung spokesman declined to comment.

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