Samsung gives lifeline funding to rival Sharp

SAMSUNG has made the peculiar move of investing in one of its main rivals, Sharp.

The Korean company yesterday announced it had bought a three per cent stake in the struggling Japanese TV maker for ¥10.4bn (£740m), in a deal that will act as a lifeline for Sharp and strengthen the bonds between the two companies.

Sharp, which has admitted to doubt over whether the company will survive in future, saw its shares rise by 14 per cent yesterday following the news.

Although the two companies rival each other by selling TVs to consumers, Samsung is also a big customer for Sharp, providing panels for some of Samsung’s LCD TVs. This pact will strengthen that bond and see Sharp supply Samsung with far more of its panels.

Sharp said the deal will create “mutual trust” between the two firms while Samsung said the agreement would ensure it has a diverse set of suppliers.

Samsung’s investment makes it the fifth-largest shareholder in Sharp.

The Japanese firm has been the worst hit by a global slowdown in TV sales, which has also affected Panasonic and Sony – although all three have been boosted recently by a weak yen which has made their products cheaper for foreign consumers.

Significantly, Sharp is one of the major suppliers of screens for the iPhone and iPad, made by Samsung rival Apple.