This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Deal: Corning to Buy Samsung Out of LCD Venture

NEW YORK ( The Deal) -- Corning (GLW - Get Report) on late Tuesday, Oct. 22, agreed to buy partner Samsung Display's 43% stake in their liquid crystal display venture, giving the South Korean company a direct stake in itself as competition in the smartphone and tablet market heats up.
 
Corning, of its namesake town in New York state, said the deal entails Samsung Display taking $1.9 billion in new convertible preferred shares in Corning after it cedes its holding in the Samsung Corning Precision Materials Co. Ltd. venture, which was launched in 1995. Corning said it would spend an additional $300 million buying out unnamed minority partners in the venture.
 
Samsung Display will also buy an additional $400 million worth of the new convertible Corning shares, eventually making it Corning's biggest shareholder, with about 7.4% of the company.
 
Samsung Display is a unit of Seoul-based Samsung Electronics.

"We are excited to enter this new era of collaboration in our 40-year equity relationship with Samsung, one of the world leaders in consumer electronics," said Corning Chairman, CEO and President Wendell Weeks in a statement.
 
Samsung and Corning began cooperating in traditional television displays in the 1970s and Samsung now uses Corning's Gorilla Glass in many of its cellular phones and tablets. Corning said the deal would give it immediate access to the $1.2 billion in cash held by the venture and assigned to Corning.
 
The New York company said the deal would also allow it to shave $100 million off the annual cost of production at the venture. Corning expects its annual sales to increase by $2 billion by consolidating the venture, with profit before special items increasing by $350 million each year. That will lead to a 20% boost to its earnings per share for this year and 2015, Corning said. The company also announced a $2 billion share buyback and said it had signed a 10-year supply agreement with Samsung.
 
The new shares will have an annual coupon of 4.25% and can be converted into common shares based on a price of $20 per share. They can't be converted for seven years.

Samsung is the world's biggest maker of cellphones and is eager to remain not only the archrival of Apple (AAPL)and its iPhone and iPad devices but also a key components supplier. The company in August announced an agreement for 90% of Dresden-based Novaledin a deal with an enterprise value of 260 million euros ($403 million).
 
Novaled is a supplier of organic light-emitting diode chemicals, which are used in the production of LED screens.
 
Samsung Electronics shares closed 13 won lower at W1,442,000 in Seoul Wednesday. The company has a market value of W212.4 trillion ($200.1 billion).


 
 
 
 
 

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
GLW $21.50 -1.47%
AAPL $132.54 0.88%
FB $80.54 0.07%
GOOG $540.11 -0.44%
TSLA $247.73 0.86%

Markets

DOW 18,232.02 -53.72 -0.29%
S&P 500 2,126.06 -4.76 -0.22%
NASDAQ 5,089.3620 -1.4320 -0.03%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs