Sharp Corp. will buy about $357 million worth of new shares from Pioneer Corp. to form alliances and respond to increasing shareholder pressure for better returns.

While Sharp is one of the strong players in the fast-growing flat TV market, Pioneer has been losing money because it lacks the scale to make its products as efficiently as Matsushita Electric Industrial or LG Electronics Inc.

Pioneer said it would issue 30 million shares to Sharp, raising 41.4 billion yen ($357.3 million) and making Sharp its top shareholder with a stake of 14.3 percent. Sharp, in turn, will allot 10 million treasury shares to Pioneer for 19.7 billion yen.

The two companies said they would work together on the development of next-generation DVD players, network-related products for the home, car electronics and imaging and display technology.

By: Demory
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