OSAKA - Sharp Corp. and Qualcomm Inc. have reached a basic agreement on a capital and business tie-up, with the U.S. telecommunication product maker investing up to 10 billion yen in the struggling Japanese electronics firm, sources close to the matter said Tuesday.
The two companies will jointly develop energy-efficient display panels for smartphones, the sources said. They are expected to announce their agreement possibly later Tuesday, they said.
Sharp will issue 5 billion yen worth of new shares for allotment to Qualcomm by the end of this year at the earliest. Qualcomm will decide on whether to invest another 5 billion yen depending on progress in their joint display panel development, the sources said.
Based on Sharp shares' closing price Monday of 172 yen on the Tokyo Stock Exchange, a 10 billion yen investment would give Qualcomm a shareholding of about 5 percent in the Japanese firm, nearly matching the current top shareholder Nippon Life Insurance Co.'s 5.01 percent stake.