Hon Hai Precision Industry Co (鴻海精密) chairman Terry Gou (郭台銘) has raised his stake in Sakai Display Products Corp (SDP) — which he and Sharp Corp of Japan jointly own — to more than 50 percent.
In a statement released yesterday by Sharp — in which Hon Hai holds a 66 percent stake — the Japanese electronics maker said it had sold 436,000 Sakai flat-panel plant shares to SIO International Holdings Ltd, owned by Gou, for ￥17.17 billion (US$147 million).
After the transaction, Gou’s stake in the Sakai plant via SIO rose to 53.05 percent from 37.61 percent, while Sharp’s stake in the flat-panel production site fell to 26.71 percent.
Sharp said it would book a profit of about ￥234 million from the disposal of the stake in the Sakai plant during the October-to-December period.
Analysts said that Gou bought more shares of the 10th-generation LCD Sakai plant to gain control of the plant, which specializes in manufacturing large panels for TVs.
By taking advantage of the closer ties with Sharp in flat-panel production, Hon Hai seeks to boost its competitive edge to take on South Korea’s Samsung Electronics Co in the global flat-screen market, they said.
In Taiwan, Hon Hai is the largest shareholder of flat-panel maker Innolux Corp (群創).
Sharp’s announcement followed another announcement by the Investment Commission a day earlier that it had approved an application filed by a local investment firm owned by Gou’s eldest son — Gou Shou-cheng (郭守正) — to put ￥17.1 billion into his father’s SIO to gain a stake in the Sakai plant.
In addition, the younger Gou received approval from the Investment Commission to spend an additional ￥34.97 billion to engage in flat-panel marketing for the Sakai plant.
Analysts said that the funds invested by the younger Gou in the plant came from his father.
Terry Gou began injecting cash into the Sakai plant in July 2012 and became involved in its management the following month. The plant started to turn a profit in 2013, and remained profitable as of the end of last year.
Japanese newspaper Nihon Keizai Shinmbun reported earlier this week that Sharp was likely to become profitable in the current quarter, ending a nine-quarter losing steak.
Hon Hai completed the acquisition of the 66 percent stake in financially troubled Sharp in the middle of August for US$3.5 billion.
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