Hon Hai Precision is reported to be considering investing in Sharp but if it does, chairman Terry Gou would want to participate in Sharp’s management.
The two companies signed an agreement in March 2012 which would have given Hon Hai an almost 10% share in Sharp for around $708 million (Display Monitor Vol 19 No 13). However, soon after the agreement was signed, Sharp reported its largest ever annual loss and despite attempts over the following year to salvage the deal, in March 2013 the two companies failed to agree terms (Display Monitor Vol 20 No 13). However, at the time Sharp and Hon Hai said they would continue a dialogue until March 2015 to negotiate a partnership.
Gou told Japanese reporters this week that he was ready to support Sharp financially but his support was dependent on being able to join the Japanese company’s management. His insistence on being part of Sharp’s executive was also reported to be one of the stumbling blocks preventing the original deal between the two companies going ahead. Hon Hai still has a 50% interest in Sharp’s G10 LCD panel plant in Sakai city, which is operated by Sharp Display Products.
Sharp has said it will release details of its latest mid-term turnaround plan in May and is still reported to be in talks with its major banks about its second major bail-out since 2012. The company’s is expecting to report its third annual loss in four years.
