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.