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Hon Hai raises the stakes, wants 20 percent ownership of Sharp

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Hon Hai is looking to have a 20 percent stake in Sharp, doubling the amount set during a manufacturing agreement established earlier this year.

sharp logo
sharp logo

Hon Hai has been on a quest to obtain a sizable ownership of Sharp, with the companies recently entering an agreement that would give Hon Hai a 9.9 percent stake in the Japanese manufacturer. Nikkei is now reporting that Hon Hai, otherwise known as Foxconn, is looking to increase that number to 20 percent. Additionally, the company has requested that the cost of Sharp's shares be decreased from the originally agreed amount of ¥500 per share as a result its recent drop in stock value and a disappointing performance during its 2011 fiscal year. Should Sharp agree to the terms and allow Hon Hai's share to exceed 10 percent, the Taiwanese company will be also able to ask the court to dissolve the business. Although Hon Hai has not indicated it would make such a move, the ability likely contributes to Sharp's hesitation.

Sharp has already given up half of its 93 percent stake in its display division to Hon Hai, and losing an additional 10 percent of overall ownership will hurt the company even further as screens for Apple's next iPhone begin to ship. Unfortunately, Sharp's predicament is not a unique one as a majority of television manufacturing industry continues to struggle amidst a flurry of layoffs and large financial losses.