Samsung will acquire Sony's shares
in the companies' S-LCD Corporation joint venture. In return, Sony will get KRW 1.08 trillion (approx $939 million), and S-LCD will become a subsidiary of Samsung. This strategic agreement is good for Sony, because it just reported a $1.2 billion annual loss because of weak demand for TV devices, and said it's reevaluating and reorganizing its TV division into three groups (LCD television, outsourcing, and next-generation products). The deal will give Sony the opportunity to enter into a strategic relationship with Samsung that secures a steady supply of LCD panels based on market prices and without the burden of operating a manufacturing facility. For Samsung, S-LCD will ensure flexibility, speed and efficiency in both panel production and business operations. The companies established S-LCD in April 2004 "to deliver advanced and cost-competitive LCD panels to both of its parent companies." It's rumored that the deal will be sealed at the end of January, assuming regulatory authorities give their approval.
Facts about S-LCD
- Established: April 26, 2004
- Capital: KRW 3.3 Trillion (Samsung Electronics: 50 percent plus one share, Sony: 50 percent minus one share)
- Representative: Donggun Park, CEO
- Location: Tangjeong, Chung Cheong Nam-Do, South Korea
- Production Items: 7th and 8th generation Amorphous TFT LCD