NEW YORK (TheStreet) -- Corning (GLW), a manufacturer of liquid crystal display (LCD) glass, announced it has entered into a series of strategic transactions with partner Samsung's Display business, including purchasing the latter's 43% share in a joint venture, Samsung Corning Precision Materials (SCP).
Shares soared on the news, up 14.9% to $17.63 as of 10 a.m. EDT, with 16.9 million shares changing hands, far outpacing its three-month average daily trading volume of 12.8 million.
In addition to the buyout, Samsung agreed to a long-term LCD display glass supply partnership valid through to 2023, and the purchase of a combined $2.3 billion worth of Corning convertible preferred shares, giving it a 7.4% stake in the New York state-based company on an as-converted basis.
"Corning and its shareholders will realize attractive financial returns as the transactions produce immediate earnings accretion through the addition of the remainder of SCP, substantial cost synergies and significant incremental free cash flow," CEO Wendell P. Weeks said in a statement.
The transactions, expected to close first quarter 2014, will add around $2 billion to Corning's annual sales, $350 million in incremental profit before special items, and $500 million to cash flow.
Corning also authorized a $2 billion share repurchase program through end-2015. Corning also pre-announced earnings, due Oct. 30. Corning said it anticipated earnings of 33 cents a share on revenue of $2.1 billion, a 10% year-on-year increase.
TheStreet Ratings team rates Corning Inc as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation: