KRONACH, Germany " Japan's Sharp Corp. is taking a stake in the battered German consumer electronics maker Loewe AG, a move that will allow Loewe to accelerate its move to flat-screen TV production.
Sharp International Finance, the London-based subsidiary of the Sharp, will hold a nearly 10-percent stake in Loewe worth 4.3 million euros ($5.2 million) in the form of a shared capital, the German company said. A future increase of Sharp's share has not been ruled out.
The partnership between Loewe and Sharp dates back to 2000, starting with the development and production of small-format LCD TVs for the Japanese electronics giant. During 2003, both companies extended their partnership to large-screen LCD TVs. Since this spring, Loewe has also produced electronic modules and complete TV sets with large LCD screens for Sharp.
In return, Loewe will buy small-format, flat-panel TVs from Sharp starting this autumn. They will be manufactured by Sharp according to Loewe's specifications.
Loewe "already had a production partnership with Matsushita during the 1990's," a company spokesman said. Under the Sharp partnership, the German manufacturer wants to strengthen his position in the premium segment of the flat- panel TV market, he added.
Loewe's financial situation nevertheless remains tenuous. The TV manufacturer reportedly wants to shut down its U.S. distribution subsidiary after only two years of operation.
In addition to the Sharp deal, Loewe remains open to other potential investors, said Loewe Chairman Rainer Hecker.