Corning will take over Samsung Display’s stake in its LCD glass joint venture, in a deal that includes a new 10-year LCD display glass supply agreement between Corning and Samsung Display.
Corning Inc. has announced that it will be acquiring Samsung Display’s stake in its LCD glass joint venture in a deal that could see the Samsung Electronics Co. Ltd. subsidiary take a 7.4% share in the manufacturer of Gorilla Glass.
The deal includes a new 10-year LCD display glass supply agreement between Corning and Samsung Display – which makes LCD panels for tablets and televisions – that will add about USD 2 billion to Corning’s annual sales.
Samsung will receive convertible preferred shares with a face value of USD 1.9 billion and will make an additional USD 400 million investment in Corning by subscribing to new convertible preferred shares.
If the preferred shares are converted, Samsung would get a 7.4% stake in Corning. The shares are convertible at USD 20 per share after seven years, with Corning having the option to force conversion if its stock goes above USD 35.
Samsung owns 43% of the Korea-based joint venture, Samsung Corning Precision Materials Co. Ltd. (SCP), which was set up in 1995.
Corning will also pay about USD 300 million to buy out minority shareholders in the joint venture, which makes active matrix LCD glass used in television sets, notebook computers, desktop monitors, digital cameras and mobile phones.
The US company said the transaction, expected to close in the first quarter of 2014, would add about USD 350 million in annual profit before special items.