Samsung to Buy Sony's Share of LCD Panel Joint Company for $934 Million
Sony said Monday it will sell off its entire stake in an LCD (liquid crystal display) manufacturing joint venture with Samsung Electronics for 1.08 trillion won (US$934 million).
The two companies signed a contract under which Samsung will turn the company, S-LCD, into a fully-owned subsidiary that will still provide panels for Sony televisions. The Korean-based LCD manufacturer was established in April of 2004, with Sony holding just below a 50 percent share.
The move comes as Sony faces deep losses in televisions and faces questions as to whether it can revive the once-core business. The Tokyo-based company said in November it expected to lose over a billion dollars in the current fiscal year through April, though it is currently recalculating its forecast in light of the sale.
"This deal will allow Sony to acquire LCD panels from Samsung Electronics in a stable way based on market prices, without the responsibility or costs that come with operating a factory," Sony said in a press release.
Like domestic peers, Sony has long struggled to make its TV business profitable against foreign rivals like Samsung and Vizio in the U.S., but executives have repeatedly said they won't abandon the product. The firm's latest plan calls for a focus on profitability over the number of units sold, and shifting to acquiring panels from outside manufacturers.
The iconic Japanese company has said it is focused on a "four-screen strategy," which aims to offer content and interconnect smartphones, laptops, tablets, and televisions. It announced in October it would acquire Ericsson's 50 percent stake in their Sony Ericsson mobile phone joint venture, allowing it to better integrate smartphones into its overall product lineup.
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