Sat, Sep 22, 2012 - Page 13 News List

Hon Hai mum on tie-up with Sharp for SE Asia

Staff writer, with CNA

Hon Hai Precision Industry Co (鴻海精密) yesterday declined to comment on a Japanese newspaper report that it would collaborate with Sharp Corp to sell smartphones in Southeast Asia.

According to the Yomiuri Shimbun, the two companies are planning to join forces to tap into the smartphone markets in various Southeast Asian countries, such as Malaysia, Thailand and Vietnam.

Hon Hai and Sharp are in talks to renegotiate the terms of a proposed acquisition deal in which the Taiwanese firm and three of its affiliates are planning to buy a nearly 10 percent stake in the Japanese electronics giant.

In March, the two sides signed an agreement to buy the Sharp stake for ¥67 billion Japanese (US$857 million), or ¥550 per share.

However, Sharp’s shares have tumbled almost 70 percent since then, hitting a low of ¥164 on Aug. 15 amid concerns over its bottom line, prompting the two companies to renegotiate the terms of the deal, including the acquisition price.

The two companies have not reached an agreement, and market observers are watching closely to see how the developments pan out.

Although Hon Hai did not comment on the Yomiuri Shimbun report, market sources said that rising tensions between China and Japan amid sovereignty disputes over the a chain of islands in the East China Sea has led Sharp to seek revenue sources other than China.

The move to team up with Hon Hai to penetrate the Southeast Asian market is one of the options that could help Sharp alleviate the impact of anti-Japan sentiment among Chinese consumers, they said.

However, Japan’s Mainichi Shimbun reported that Intel Corp was also negotiating with Sharp for a possible investment of more than ¥30 billion in the Japanese firm.

The report said Intel and Sharp could work together in the smartphone business by using the US firm’s chips and the Japanese firm’s LCD panels. Hon Hai declined to comment on the Intel-Sharp tie-up report.

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