Sharp accepts 25.3 billion yuan capital injection from Hon Hai and officially becomes its subsidiary

In April this year, Hon Hai reached an agreement with Sharp. Hon Hai invested 388.8 billion yen to acquire 66% of Sharp’s shares. Before investing, the deal must first pass local antitrust reviews. Hon Hai had previously expected to complete the capital injection by the end of June this year, but this expectation did not materialize as scheduled. Just last week, China’s Ministry of Commerce approved the deal, and one day later, Hon Hai immediately completed its capital injection into Sharp.

After Hon Hai’s capital injection is completed, Sharp’s former president Kozo Takahashi resigned, and Hon Hai Vice President Dai Zhengwu will become Sharp’s new president. Prior to this, Hon Hai had revealed a series of plans to restructure Sharp, including the potential layoff of 7,000 employees. Dai Zhengwu stated at the shareholders' meeting that he would use the Hon Hai spirit to run Sharp. Currently, Hon Hai has planned five business directions for Sharp to turn defeat into victory, including the Internet of Things, healthy living, smart home, high technology, and clean energy. Hon Hai founder Terry Gou even said that it could take anywhere from 3 to 6 years. If Hon Hai manages Sharp well, it would be willing to hand it back to Sharp.

The industry believes that an important reason why Hon Hai invested in Sharp is to obtain Sharp’s panel technology. Terry Gou has previously stated that Sharp will make key investments in display technologies including new generation IGZO, OLED, camera and sensing technology, and OLED panels have become the focus of investment by both parties.