Hon Hai Precision Industry Co., which makes Apple devices, will pay 132.9 billion yen ($1.6 billion) to become the top shareholder in Sharp Corp., the large Japanese electronics manufacturer that has been struggling in its export-oriented business.

Hon Hai, part of Taiwan's Foxconn Technology Group and the world's biggest contract maker of electronics by revenue, will buy 9.9 percent of Sharp for 66.9 billion yen, the Japanese electronics manufacturer said Tuesday. Foxconn Chairman Terry Gou and several related entities will buy another 46.5 percent stake in Sharp's display unit for 66 billion yen.

Sharp, which will issue 121.65 million shares in the deal, forecast a 290 billion yen loss for the fiscal year ended March 31, as a glut of production and inventory cut television prices and, therefore, slashed Sharp's revenue.

We needed to take action as we face a strong yen and a rapidly changing business environment, Takashi Okuda, who becomes Sharp's president on April 1, said at a press conference in Tokyo, according to Bloomberg.

It's no longer an option to do everything from development, design, manufacturing, marketing and customer service. It's more important for us to collaborate with business partners to be competitive in the market.

Hon Hai will co-manage Sharp's Sakai plant and buy up to 50 percent of its output as part of the deal.

Sharp American Depositary Receipts rose $21, or 4.4 percent, to $495 in afternoon trading.