Samsung to buy out Sony's stake in LCD joint venture
South Korean giant Samsung Electronics today said it will buy out Japanese major Sony Corp's stake in their LCD manufacturing joint venture for 1.08 trillion won (USD 940 million).
The joint-venture was established in 2004, when the global economy witnessed a growth in demand for consumer electronics. However, the LCD panel and TV market conditions have changed since then.
"In order to respond to such challenging conditions and to strengthen their respective market competitiveness, the two companies have agreed to shift to a new LCD panel business alliance," Sony and Samsung said in a joint statement.
"Under the agreement, Samsung will acquire all of Sony's shares of S-LCD Corporation, the two companies' LCD ((liquid crystal display) panel manufacturing joint venture, making S-LCD a wholly owned subsidiary of Samsung," they said.
The share transfer and payments are expected to close by the end of January 2012, subject to necessary approvals from regulatory authorities.
The transaction will enable Japanese electronic giant Sony to monetise its shares in S-LCD and aims to secure a flexible and steady supply of LCD panels from Samsung, based on market prices and without the responsibility and costs of operating a manufacturing facility.
The agreement would allow Samsung and Sony to continue cooperative engineering efforts focused on LCD panel technology.
Samsung expects that the whole ownership of S-LCD will provide it increased flexibility, speed and efficiency in both panel production and business operations.
