Terry Gou (???), founder and chairman of Taiwan-based manufacturing giant Hon Hai Precision Industry Co. (??), has raised his stake in the Sakai Display Products Corp. (SDP) -- which he and Sharp Corp. jointly own -- to more than 50 percent.
In a statement released on Thursday by Sharp -- in which Hon Hai holds a 66 percent stake -- the Japanese electronics maker said it has sold 436,000 Sakai flat panel plant shares to SIO International Holdings, owned by Gou, for 17.17 billion Japanese yen (US$147 million).
After the transaction, Gou's stake in the Sakai plant through the presence of SIO has risen to 53.05 percent from 37.61 percent, while Sharp's stake in the flat panel production site has fallen to 26.71 percent.
According to Sharp, it will book about 234 million yen in profit from the disposal of the stake in the Sakai plant during the October-December period.
Market analysts said that the move by Gou to buy more shares of the 10th-generation LCD Sakai plant is aimed at taking a controlling stake in the production site, which specializes in large panel manufacturing for TV use.
By taking advantage of the closer ties with Sharp in flat panel production, the analysts said, Hon Hai seeks to boost its competitive edge to take on South Korea's Samsung Electronics Co. in the global flat screen market. In Taiwan, Hon Hai is the largest shareholder of flat panel maker Innolux Corp. (??).
Sharp's announcement echoed another announcement made by Taiwan's Investment Commission a day ealier that it has approved an application filed by a local investment firm owned by Gou's eldest son -- Gou Shou-cheng (???) -- to put 17.1 billion yen into his father's SIO in a bid to gain a stake in the Sakai plant.
In addition, the younger Gou has been also approved by the Investment Commission to spend an additional 34.97 billion yen to engage in the flat panel marketing business for the Sakai plant. The analysts said that the funds invested by the younger Gou in the Sakai plant came from his father.
Terry Gou's first acquisition of a stake in the Sakai plant, which had incurred losses, was announced in March 2012. He began injecting cash into the advanced display panel plant in July 2012 and got involved in its management the following month.
With the presence of Gou, the Sakai plant started to turn a profit in 2013, and remained profitable as of the end of 2015.
In mid-August, Hon Hai completed an acquisition of the 66 percent stake in financially troubled Sharp for US$3.5 billion. The world's largest contract electronics maker, which assembles iPhones and iPads for Apple Inc., has vowed to try to help Sharp become profitable.
Japan's Nihon Keizai Shinbun reported earlier this week that Sharp is likely to become profitable in the current quarter, ending a nine- quarter losing steak.
Following the acquisition, Hon Hai executive Tai Cheng-wu (???) took over as president of Sharp from his predecessor Kozo Takahashi after the board of directors approved the appointment on Aug. 13.
Source: Focus Taiwan News Channel