Company also planning to buy 38% interest in Sakai Display Products.
Taiwanese Electronics assembler Hon Hai Precision, better known as Foxconn, has forwarded an acquisition offer to Sharp for its troubled liquid panel display business.
It is not known how much Foxconn is willing to pay for the business, but the deal is expected to help the Japanese company to offload operations carrying a heavy downside risk.
If the deal materialises, Foxconn would grab a majority stake in the liquid crystal display company spun off by Sharp.
The Taiwanese electronics group is also seeking funding from one of Sharp’s major investors, Apple, for the acquisition, reported Nikkei business daily.
Apple funded nearly 100 billion ($833m) in Sharp’s smartphone-related capital spending in 2012.
Foxconn is also reportedly planning to acquire 38% interest in Sakai Display Products, a jointly owned entity by both the companies.
Sakai Display Products manufactures LCD panels for televisions.
Sharp was once known for manufacturing premium TVs and was the screen supplier to Apple and other big businesses, but it came under heavy pricing pressure from Asian rivals who delivered the same products at lesser price.
Sharp’s LCD business recorded consolidated sales of ¥907.1bn ($7.5bn) in fiscal 2014, but things took a major turn when the business recorded an operating loss of ¥13.7bn ($114m).
The acquisition is expected to help Sharp remain in the business while limiting risks of a major loss.
In May, Sharp sought a bailout of roughly $1.9bn from banks and said that it would cut 5,000 jobs.
However, if the deal materialises then the company could retain its staff in Japan.