Hon Hai plans buying controlling stake in Hitachi Displays for $1.21 billion: report

Taiwan's Hon Hai Precision Industry Co, the world's largest contract electronics maker, is planning to acquire a controlling stake in Hitachi Displays Ltd. for $1.21 billion (100 billion yen), to create the world's largest supplier of small and mid-size LCD panels.

The Nikkei newspaper reported today without saying where it got the information that Hon Hai would buy about $1.21 billion worth of shares of Hitachi's LCD panel subsidiary, Hitachi Displays Ltd, an LCD panel joint venture of Hitachi and Canon Inc.

After mulling a stake increase in Hitachi Displays or making it into its wholly-owned subsidiary, Cannon had earlier this year said that it would not increase its stake from its current 24.9 per cent.

Hon Hai, which is in the final stages of negotiations, plans to acquire the shares through two 50 billion yen private offerings in 2011 and 2012. The purchase will reduce Hitachi's stake in the venture to 30 per cent from 75.1 per cent, the paper said.

Hitachi Displays will use the funds to build a factory in Japan that will start operating in 2012, which will double its annual capacity, the Nikkei said.

Foxconn International Holdings, the mar­ket­ing name for Hon Hai and one of the biggest contract manufacturers for Apple, Dell and Sony among others, had in November 2010 acquired LCD panel maker Chimei Innolux in a $5.3-billion deal.