Samsung has announced that it will invest 10.4 billion yen (£74 million) in struggling Japanese tech company Sharp Corp.
According to the terms of the deal, Samsung will pay the said sum for a little over over three per cent stake in Sharp and, in return, will receive LCD panels for smartphones and televisions (in particular, 32in television screens) from the Japan-based manufacturer. With the deal inked, Samsung has now emerged as the largest individual stakeholder in Sharp that is not a financial institution, and the fifth largest shareholder overall.
However, Samsung says it does not want to be involved in Sharp's management.
Having been on the lookout for partners who could provide some much-needed capital, this latest cash infusion from Samsung is likely to prove instrumental for Sharp to bring its house in order and move ahead with its turnaround plans.
While the deal grants Samsung better access to Sharp's LCD supply, the Japanese tech company can use the cash infusion to improve and expand its smartphone and television panel production.
Sharp's market value saw a stiff 14 per cent rise in Tokyo yesterday after news about the deal was leaked.