TOKYO--Sharp Corp. (6753.TO) and Samsung Electronics Co.
(005930.SE) are in talks for the South Korean technology giant to
invest about 10 billion yen ($108 million) in the embattled
Japanese firm, people familiar with the matter said Wednesday.
Under the deal, Sharp may issue new shares to Samsung later this
month and Samsung may become a key customer for Sharp's liquid
crystal display panels, the people said.
The investment from Samsung would come as Sharp--a big supplier
to Apple Inc. (AAPL)--scrambles to raise funds and secure customers
for its liquid crystal displays in an ongoing effort to prove to
its bank lenders that its business prospects remain solid.
Sharp shares rose 16% in early Tokyo trade after Japanese media
reports that the two companies had agreed to a deal.
If completed, the deal would mark a historic shift in the
balance of power in the electronics industry. While Japanese firms
once dominated, Samsung's emergence as a manufacturing and
technological force has reshaped the landscape.
Sharp's decision to turn to Samsung--once its most feared rival
in LCD panels and televisions--signals the desperate situation
facing Sharp. It needs capital injections to secure its balance
sheet after a planned Y66.9 billion investment from Taiwan's Hon
Hai Precision Industry Co. (2317.TW) fell through last year when
Sharp's business prospects and share price worsened.
Write to Juro Osawa at juro.osawa@dowjones.com and Min-Jeong Lee
at Min-Jeong.Lee@wsj.com
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