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Samsung to become Sharp's largest foreign shareholder with 3% stake worth $112M

post #1 of 33
Thread Starter 
Japanese electronics maker Sharp announced on Wednesday that Samsung will invest some $112 million for a 3 percent stake in the company, with the deal providing for the long-term supply of LCD panels.

Sharp


In accordance with the deal, as noted by The Next Web, Samsung will purchase 35.8 million shares of Sharp stock at a price of 290 yen per share on March 28, giving the Korean tech giant a 3.08 percent voting rights equivalent in the struggling Japanese firm. Sharp announced the alliance in a prepared statement published on its corporate website.

With the 10.4 billion yen (roughly $112 million) purchase, Samsung will become the fifth largest major Sharp shareholder and the largest foreign entity to hold a stake in the display maker. Previously, U.S. firm Qualcomm was the biggest foreign shareholder after a recent investment gave the chipmaker a 2.64 percent share of the company.

While Sharp already supplies Samsung with a limited number of displays, the capital alliance will "provide a long-term, stable and timely supply of LCD panels for large-size TVs and small- and medium-size LCD panels for mobiel decies such as notebook computers," the release said.

Apple also taps Sharp for LCD panels, meaning Samsung's move could be significant given the ongoing feud between the two tech titans. A recent The New York Times report posits that Samsung's injection of capital could help Sharp reduce its dependance on Apple, which uses the Japanese company's panels in iPhones and iPads.

Sharp plans to put the proceeds toward the development of high-definition LCD technologies and investment in facilities dedicated to the manufacture of mobile LCD panels.
post #2 of 33
So is samsung coping Apples investments also?
post #3 of 33
Whatever happened to OLEDs are the future? /s

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post #4 of 33
Samsung is certainly hitting Apple where it hurts: squeezing elements of the supply chain. For Tim Cook, master of logistics, this must be some interesting challenge.
post #5 of 33
Build all your own stuff. It's the only way to be sure.
post #6 of 33
If this piece of news of true, that means the end of Foxconn working with Sharp.

Apart from Samsung and Sharp, Apple is only left with Sony which produce quality display panels. LG just isn't up there yet.

Samsung with Sharp, LG is Korean which cant be trusted. ( Although they are enemy of Samsung ), Sony is competing on every front as well. AU Optronics is doing ok for current technology. But they dont have any future hot tech down the line.

Innolux, Formally Chi Mei, does well in Mid and Low Range, High Price quality ratio panel. But again, Not top quality panel ( yet ) and has relatively little future proof tech.
Edited by ksec - 3/6/13 at 2:08am
post #7 of 33

Japanese electronics maker Sharp announced on Wednesday that Samsung will bribe them some $112 million for a 3 percent stake in the company, with the deal providing for the long-term information on Apple's intentions with them...

 

Fixed that for AI.

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post #8 of 33
Apple would just have to make a larger investment in Sharp

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post #9 of 33

If you guys think, that with a 3% stake in a company you can run it as you wish, then you are misguided!! It won't affect the Apple-Sharp relationship in any way.

post #10 of 33
You are correct.

Being the fifth largest shareholder in a company gives you no leeway whatsoever, especially if you are a company with such an established history of "not being corrupt"...
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post #11 of 33

Well, I hope this is not going to affect Apple's shipments or production. Guess it's time for Apple to fast-track its promise of bringing the production to US. Is Samsung really interested in Sharp or is it just doing this because Apple's gonna stop having Samsung produce Apple's gadget parts?

post #12 of 33

I don't understand why Apple wouldn't have upped the investment to keep Samsung out.

post #13 of 33
Yep, just use the $400M that Samsung owes to them and become a 10% holder 1smile.gif
post #14 of 33
This reminds me of Dallas, except its the Koreans who have taken on J.R. Ewings ruthless business strategy
post #15 of 33
Meanwhile... Apple (in classic scene from "The Holy Grail")

RUN-AWAY! RUN-AWAY! RUN-AWAY! RUN-AWAY!
post #16 of 33
Quote:
Originally Posted by jay-t View Post

If you guys think, that with a 3% stake in a company you can run it as you wish, then you are misguided!! It won't affect the Apple-Sharp relationship in any way.

Yeah? How about the Apple-public PR relationship? Any affect there?

post #17 of 33
Quote:
Originally Posted by jay-t View Post

If you guys think, that with a 3% stake in a company you can run it as you wish, then you are misguided!! It won't affect the Apple-Sharp relationship in any way.

Of course not. I think in Japanese law you need to have about 33% to have a say in the company's decisions.

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post #18 of 33
WS will no doubt see this as yet another reason to lower ratings for AAPL.
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post #19 of 33
Quote:
Originally Posted by Aizmov View Post

Of course not. I think in Japanese law you need to have about 33% to have a say in the company's decisions.

I'd be interested in your reference for that. So if I own 32.9% of a company, they would tell me to pound sand and if I own 33%, they have to listen? I don't think it works that way.

In fact, Japanese corporate law is a strange amalgam of different principles. One of the guiding principles is that they have to consider all stakeholders (suppliers, customers, employees, etc) in making decisions. That doesn't mean that those stakeholders control, but that they must be considered.

Japan is also well known for its keiretsu. Companies are all tightly linked and interconnected. The relationships and connections carry a huge amount of weight - regardless of the percentage of ownership.
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post #20 of 33
Wasn't there a report in 2012 claiming that Apple invested in Sharp facilities close to 2 billion? Was it ever confirmed? This could be interesting investment relationship....
post #21 of 33
Quote:
Originally Posted by jay-t View Post

If you guys think, that with a 3% stake in a company you can run it as you wish, then you are misguided!! It won't affect the Apple-Sharp relationship in any way.

 

That investment and the announced "alliance" buys them access to internal Sharp information: what's in development (work for a customer that may be a Samsung competitor?), product sales, inventory levels (build up for a new Apple product release?), supplier details (upstream companies to interfere with?), etc. That's a great way to keep tabs on a supplier to a competitor.

post #22 of 33
Quote:
Originally Posted by Emrul View Post

Samsung is certainly hitting Apple where it hurts: squeezing elements of the supply chain. For Tim Cook, master of logistics, this must be some interesting challenge.

I think you are way off base, this will not hurt Apple and is not squeezing their supply chain, since contract law takes priority over investment law and  Sharp are not the only supplier in the market.

Also with approx. 3% investment, that does not mean you can control the company.

 

Apple could buy majority stake in Sharp and dump the stock, just to burn Samsung "I think there was similar line in the film 'Wall Street' with Gordon Geko and Sir Lawrence Wildman.

 

Seriously I doubt this will be major issue for Apple and they probably have alternative supplies already aligned to support their needs.

post #23 of 33

Why is this even news? Pretty much every large tech company buys & sells from multiple other companies and/or has investments by, and in others as well. It's impossible to be an "island" in tech and do everything yourselves.

post #24 of 33
This is where Samsung can be commended. They invest their money pretty well. Regardless of how you feel about their ethics and tactics they are moving quickly and effectively.

Quote:
Originally Posted by jragosta View Post

I'd be interested in your reference for that. So if I own 32.9% of a company, they would tell me to pound sand and if I own 33%, they have to listen? I don't think it works that way.

In fact, Japanese corporate law is a strange amalgam of different principles. One of the guiding principles is that they have to consider all stakeholders (suppliers, customers, employees, etc) in making decisions. That doesn't mean that those stakeholders control, but that they must be considered.

Japan is also well known for its keiretsu. Companies are all tightly linked and interconnected. The relationships and connections carry a huge amount of weight - regardless of the percentage of ownership.

If you own nearly a third of any company it's hard to imagine that anyone would tell you to "pound sand." His comment is about what you are allowed to by law. Surely you understand why a numerical demarkation point would be set. At 33% there might be a legal requirement but at 32.9% it would not be legally required.
Edited by SolipsismX - 3/6/13 at 7:11am

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post #25 of 33
Quote:
Originally Posted by JollyPaul View Post

 

That investment and the announced "alliance" buys them access to internal Sharp information: what's in development (work for a customer that may be a Samsung competitor?), product sales, inventory levels (build up for a new Apple product release?), supplier details (upstream companies to interfere with?), etc. That's a great way to keep tabs on a supplier to a competitor.

All your points make sense. However, as I understand it, Samsung invested in Sharp. As far as I know they do not have a seat on the board nor do they have people in the executive team. Just because their investment is big, it doesn't mean that they have any more access to internal, and most certainly, undisclosed agreements of Sharp with its customers, than any other shareholder except of the financial report.

post #26 of 33
Quote:
Originally Posted by Suddenly Newton View Post

Whatever happened to OLEDs are the future? /s

Samsung is a multi faceted company focusing on multiple areas all at once.

 

They use the diversification strategy to their advantage. This is what makes them survive.

 

Quote:
Originally Posted by bro2ma View Post

So is samsung coping Apples investments also?

 

I believe you have a misspelling. Should be "copying".

 

Are they copying?

 

No. Sharp negotiated an investment from Foxconn but that didnt turn out well. So their next investment client was to look at Samsung.

 

Samsung then agreed to invest in Sharp as its already a supplier to them.

 

 

Samsung is a shrewd investor. This would throw a monkey wrench into Apple's strategy. What a brilliant move by them.

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post #27 of 33
Quote:
Originally Posted by AppleInsider View Post
While Sharp already supplies Samsung with a limited number of displays, the capital alliance will "provide a long-term, stable and timely supply of LCD panels for large-size TVs and small- and medium-size LCD panels for mobile devices such as notebook computers," release said.
...
Sharp plans to put the proceeds toward the development of high-definition LCD technologies and investment in facilities dedicated to the manufacture of mobile LCD panels.

 

It sounds like Samsung needs help keeping up with the demand for smaller LCDs for mobile devices, and is:

 

  • Shifting responsibilty for larger panels to Sharp
  • Planning for longterm help from Sharp for smaller mobile panels
post #28 of 33
Quote:
Originally Posted by SolipsismX View Post

If you own nearly a third of any company it's hard to imagine that anyone would tell you to "pound sand." His comment is about what you are allowed to by law. Surely you understand why a numerical demarkation point would be set. At 33% there might be a legal requirement but at 32.9% it would not be legally required.

First, he said that "I think in Japanese law you need to have about 33% to have a say in the company's decisions.". That means that if you don't have 33%, you don't have any say. My point was that even if the law said that 33% was required to have a say, no company in their right mind is going to completely ignore someone just because they "only" have 32.9%.

Second, I'm still waiting for him to provide evidence that there's any such law.
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post #29 of 33

I think some of you maybe looking at this in the wrong way. Samsumg maybe doing to ensure they get some of the profits of apple doing business with Sharp. They may have lost apple's direct business but they can still profit elsewhere from apple's business.

post #30 of 33
Quote:
Originally Posted by jragosta View Post

First, he said that "I think in Japanese law you need to have about 33% to have a say in the company's decisions.". That means that if you don't have 33%, you don't have any say. My point was that even if the law said that 33% was required to have a say, no company in their right mind is going to completely ignore someone just because they "only" have 32.9%.

The logic of his statement is soundly written but your contention with it is not. He didn't say "You get not say in a Japanese company unless you own 33% or more" he clearly stated that by law you get a say at 33%. In no way did he imply that you can't be offered a seat on the board or any other position at less than 33%.

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post #31 of 33
mobiel decies????
post #32 of 33
Quote:
Originally Posted by SolipsismX View Post

The logic of his statement is soundly written but your contention with it is not. He didn't say "You get not say in a Japanese company unless you own 33% or more" he clearly stated that by law you get a say at 33%. In no way did he imply that you can't be offered a seat on the board or any other position at less than 33%.

You're right. His contention on this occasion is known as 'Mad Hatter's Logic".

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post #33 of 33
Quote:
Originally Posted by digitalclips View Post

You're right. His contention on this occasion is known as 'Mad Hatter's Logic".

(see Alice In Wonderland for details)

I would but I'm late, I'm late, for a very important date.

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