Samsung becomes Sharp stakeholder

Samsung agreed Wednesday to take an equity stake in embattled Japanese tech company Sharp, which has been under pressure to improve its financial position.

According to the terms of the deal, Samsung will pay $112 million for slightly more than 3% of Sharp. In return, Samsung will receive LCD panels for televisions and smart phones from the Japanese manufacturer.

The deal is a rare tie-up between Japanese and South Korean tech firms, which compete for many of the same consumers.

Yet the cash infusion could prove vital for Sharp, which has been shopping around for partners willing to provide much needed capital. Sharp warned last year it might be forced to suspend operations, leading to a search that included talks with numerous suitors.

Sharp pursued a deal with Taiwan's Hon Hai, but the negotiations failed. Another round of talks, with San Diego-based Qualcomm, did result in a deal.

Qualcomm (QCOM, Fortune 500) and Samsung will now rank among Sharp's largest shareholders. Qualcomm owns about 2.6% of Sharp.


/CNN/