Samsung Display to buy stake in Corning

Nieuws Mobiel Wereld 23 OCT 2013
Samsung Display to buy stake in Corning
Corning announced a series of strategic and financial agreements with Samsung Display to strengthen product and technology collaborations between the two companies. Under the agreement, Corning will take full ownership of Samsung Corning Precision Materials, a joint venture with Samsung Display that manufactures LCD glass in Korea. Samsung Display currently owns 43 percent of SCP. After selling its stake in SCP, Samsung Display will invest USD 1.9 billion in new convertible preferred shares of Corning. 

Corning will then buy out the other minority shareholders in SCP, and Samsung Display will invest another USD 400 million Corning convertible preferred shares. Samsung Display will have a 7.4 percent stake in Corning and be subject to a cap of no more than 9 percent. The preference shares pay 4.25 percent annually and can be converted after seven years, at USD 20 per common share. 

Corning said the acquisition of SCP should provide USD 100 million in pretax synergies from 2015, USD 2 billion in additional annual sales and could generate up to USD 2 billion in extra cash flow in the next four years. It also announced plans to spend up to USD 2 billion on a share buyback to dilute the share issue to Samsung. 

As part of the deal, the two companies agreed a new long-term LCD display glass supply agreement through 2023 and a strengthening of their technology collaboration on strategic product development and commercialization initiatives.

Categories:

Mobiel

Companies:

Samsung,  Corning

Regions:

Wereld

Tags:

Components, Devices, Procurement & outsourcing, Cooperations & alliances, Wholesale, M&A buyouts & divestments, Research and development

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