JAPANESE electronics maker Sharp will buy about $357 million worth of new shares from Pioneer and work with its loss-making rival in developing DVD players, car electronics and displays.
The deal is the latest move by Japan’s electronics conglomerates to form alliances or ditch unpromising businesses to try and keep up with deep-pocketed global rivals and respond to increasing shareholder pressure for better returns.
Sharp is one of the world’s top makers of liquid crystal display TVs, competing with Sony and Samsung Electronics while Pioneer is a producer of plasma display televisions, audio equipment and car electronics.
While Sharp is one of the strong players in the fast-growing flat TV market Pioneer has been losing money because it lacks the scale to make its products as efficiently as Matsushita or LG Electronics. “This is more a matter of helping Pioneer than anything else. It doesn’t seem as if it’s positive for Sharp,” said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management. “What it basically means is that Pioneer can’t go it alone.”
Pioneer said it would issue 30 million shares to Sharp, raising $357.3 million and making Sharp its top shareholder with a stake of 14.3%. Sharp, in turn, will allot 10 million treasury shares to Pioneer for 19.7 billion yen.
Sharp president Mikio Katayama (left) shakes hands with Pioneer president Tamihiko Sudo during a news conference in Tokyo on Thursday. — AP
