Samsung and Sony has entered agreements to focus their current business relationship on LCD panels.
Samsung will now own all of Sony's shares of S-LCD Corporation, making it a wholly owned subsidiary. By entering into a new strategic agreement for the supply and purchase of LCD panels, the two companies can continue cooperative engineering efforts focused on LCD panel technology.
The share transfer and payment is set to kick in end of Jan 2012.
Read on for the full press release.
SEOUL, Korea - Samsung and Sony today announced that the two companies have signed agreements to transition the current business relationship with respect to LCD panels.
Under the agreement, Samsung will acquire all of Sony’s shares of S-LCD Corporation (“S-LCD”), the two companies’ LCD panel manufacturing joint venture, making S-LCD a wholly owned subsidiary of Samsung. In consideration for the share transfer, cash consideration of approximately KRW 1.08 trillion will be paid to Sony by Samsung. Concurrently, the two companies have entered into a new strategic agreement for the supply and purchase of LCD panels with a goal of enhancing the competitiveness of both companies. The agreement also allows Samsung and Sony to continue cooperative engineering efforts focused on LCD panel technology.
For Sony, this transaction will enable it to monetize 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. With whole ownership of S-LCD, Samsung anticipates heightened flexibility, speed and efficiency in both panel production and business operations.
Established in April 2004, S-LCD has continued to deliver advanced and cost-competitive LCD panels to both of its parent companies, contributing to the expansion of the respective parties’ TV businesses, and the large-sized LCD TV market overall. However, LCD panel and TV market conditions have now changed. 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.
The share transfer and payment are targeted to close by the end of January 2012, subject to necessary approvals from regulatory authorities.