OSAKA — Sharp has turned LCD factory operator Sakai Display Products into a wholly owned subsidiary for an estimated 40 billion yen ($296 million) under a deal announced Monday.

Sharp previously held a 20% stake in SDP, which produces large display panels for televisions in the city of Sakai, near Osaka. It acquired the rest from a Samoa-based investment company by handing over 11.45 Sharp shares for each SDP share it received.

Sharp issued around 38.45 million shares for the deal, equivalent to 6% of its outstanding shares, or 40 billion yen based on Monday’s closing price. This issuance has diluted Hon Hai Precision Industry’s stake in Sharp to 49.5% from 52.6%, according to Sharp — its first time falling below the 50% mark since acquiring the Japanese electronics maker in 2016.

Whether Hon Hai, also known as Foxconn, will continue to be considered Sharp’s parent company will be decided later, based on factors including the board’s composition, Sharp said. Sharp President and CEO Wu Po-hsuan was sent to the company from Hon Hai.

The Sakai plant began operating in 2009. An asset management company under Hon Hai founder Terry Gou later acquired a majority of SDP amid Sharp’s financial crisis and had sold the stake by 2019.

Sharp sees the acquisition as an opportunity to start increasing production of small and midsize panels in order to improve profitability.

SOURCE Nikkei

Sharp/NEC Display Solutions Reveals the PN L2B Series AQUOS BOARD Interactive Display