Samsung buys Sony's entire stake in LCD joint venture
26 December
2011 Last updated at 08:17
GMT
Sony's TV business has been
hurt by slowing global demand and a strong Japanese currency
The move comes as Sony has been restructuring its TV business, which has been making a loss for the past seven years.
Samsung, meanwhile, has gone on to become the world's largest maker of TVs and flat screen panels.
"Under the agreement, Samsung will acquire all of Sony's shares of S-LCD Corporation, the two companies' LCD panel manufacturing joint venture, making S-LCD a wholly owned subsidiary of Samsung," Samsung Electronics said in a statement.
Tough times The joint venture between two companies was established in 2004, when a boom in the global economy saw a surge in demand for consumer electronics.
However, things have take a dramatic turn in the last three years.
"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," Samsung said.
Sony will continue to get LCD panels from Samsung based on prevailing market prices, without having to operate a manufacturing facility.
For its part, Samsung said the full ownership of the venture will give it "heightened flexibility, speed and efficiency in both panel production and business operations".
Analysts said the deal was the right move, especially for Sony.
"In terms of direction it is positive," said Keita Wakabayashi, an analyst at Mito Securities in Tokyo.
"But if they are making a loss on the sale, one could ask why they didn't make this decision sooner."
Sony's TV business has been
hurt by slowing global demand and a strong Japanese currency
Samsung Electronics has agreed to buy
out Sony's entire stake in their liquid crystal display (LCD) joint venture.
The Korean electronics maker said it will pay Sony 1.08tn won ($939m; £600m)
in cash for its stake.The move comes as Sony has been restructuring its TV business, which has been making a loss for the past seven years.
Samsung, meanwhile, has gone on to become the world's largest maker of TVs and flat screen panels.
"Under the agreement, Samsung will acquire all of Sony's shares of S-LCD Corporation, the two companies' LCD panel manufacturing joint venture, making S-LCD a wholly owned subsidiary of Samsung," Samsung Electronics said in a statement.
Tough times The joint venture between two companies was established in 2004, when a boom in the global economy saw a surge in demand for consumer electronics.
However, things have take a dramatic turn in the last three years.
Continue reading the main story
“Start Quote
End Quote Keita Wakabayashi Mito SecuritiesIn terms of direction it is positive. But if they are making a loss on the sale, one could ask why they didn't make this decision sooner”
Triggered by the financial crisis in 2008, the
subsequent global economic uncertainty has resulted in a slowdown in consumer
demand.
At the same time, falling prices of LCD panels and flat screens have also
hurt profit margins."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," Samsung said.
Sony will continue to get LCD panels from Samsung based on prevailing market prices, without having to operate a manufacturing facility.
For its part, Samsung said the full ownership of the venture will give it "heightened flexibility, speed and efficiency in both panel production and business operations".
Analysts said the deal was the right move, especially for Sony.
"In terms of direction it is positive," said Keita Wakabayashi, an analyst at Mito Securities in Tokyo.
"But if they are making a loss on the sale, one could ask why they didn't make this decision sooner."
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