Sharp and Sony on Wednesday released a joint statement to announce the end of the companies’ joint venture to produce and sell LCD panels. Due to the “rapidly changing market for LCD panels and LCD televisions,” Sony will sell its shares of the venture, which represent 7.04% of the company. The manufacturer will also receive a cash payment equal to its original investment of 10 billion yen that will be paid by Sharp. Both the sale of shares and Sony’s cash payment will be completed by the end of June 2012. The joint press release can be found after the break.
Sharp and Sony to terminate joint venture to produce and sell large-sized LCD panels and modules
Sharp Corporation (“Sharp”) and Sony Corporation (“Sony”) today announced that their joint venture relationship to produce and sell large-sized LCD panels and modules will terminate, and that Sony will sell its shares (representing 7.04% of the issued shares) in Sharp Display Products Corporation (“SDP”) to SDP*. In consideration for the sale of shares, Sony will receive cash consideration equal to its original investment of 10 billion yen to be paid by SDP*. Both the sale of shares and the payment of cash consideration will be completed by the end of June 2012.
On July 1, 2009, Sharp transferred its LCD panel plant in Sakai City, Osaka Prefecture, to SDP, a wholly-owned subsidiary of Sharp. On December 29, 2009, Sony invested 10 billion yen into SDP in exchange for new shares issued by SDP to Sony (representing 7.04% of the issued shares of SDP) and, as a result, SDP became a joint venture company of Sharp and Sony as of the same date. In light of the rapidly changing market for LCD panels and LCD televisions, in March 2012 Sharp and Sony agreed to amend the original joint venture agreement to provide that Sony would not make additional capital injections in SDP. Based on this amendment, the companies agreed to study studied the future direction of the joint venture and other potential business relationships between the parties, including with respect to Sony’s interest in SDP.
* In the event SDP is not able to purchase or pay for those shares due to applicable legal restrictions on acquiring its own shares or for any other reason, Sharp will purchase those shares from Sony.
Impact on the consolidated financial information of Sharp, as the parent company of SDP
No material impact is anticipated on Sharp’s consolidated financial forecasts for the fiscal year ending March 31, 2013.
Impact on the consolidated financial information of Sony
No material impact is anticipated on Sony’s consolidated financial forecasts for the fiscal year ending March 31, 2013.
Sharp Display Products Corporation
Hiroshi Saji, President
1 Takumi-cho, Sakai-ku, Sakai City, Osaka Prefecture
Production and sales of large-sized LCD panels and modules
Date of Establishment:
April 1, 2009 (as a wholly-owned subsidiary of Sharp)
December 29, 2009
Share Holding Ratio:
Sharp 92.96%, Sony 7.04% (as of end of April, 2012)