Samsung Electronics is rumored to have interest in purchasing Sharp, amid drawn out takeover talks between the Japanese company and its new owner Foxconn.
Samsung Electronics’ vice chairman Lee Jae-yong had visited Japan last week, fueling the rumor. Samsung currently owns a 3 percent stake in Sharp.
Samsung had tried to purchase Sharp in recent years but talks had failed because it wanted to only buy the display plant in Sakai, Japan, while Sharp wanted to sell the company as a whole.
Samsung uses Sharp’s smaller organic-light emitting diode displays for its high-end smartphones, including its flagship Galaxy S series, and liquid crystal displays for its tablets and TVs.
Acquiring Sharp, among other things, would help Samsung gain an upper hand in supply talks with Apple, its archrival in the smartphone market and a crucial client for its component business.
Samsung is a key supplier for chips and displays for Apple, but the U.S. company has diversified its suppliers to reduce dependency on the Korean rival.
Meanwhile, Sharp and Foxconn have delayed signing the acquisition deal due to differences regarding the final price, worth nearly $6 billion.
Industry watchers say that if cash-strapped Sharp hopes to go ahead with the deal, it will have no other option but to accept Foxconn’s demand to reduce the price
If the acquisition proceeds, it is expected to pose a direct threat to Korean display makers Samsung and LG as it would combine Sharp’s display technology with Foxconn’s production capacity.
Samsung has denied that there would be any serious impact from the deal.
Source : http://www.koreaherald.com/view.php?ud=20160325000526