Breaking News
Home / Mobile / Corning to buy out Samsung’s stake in LCD JV, signs 10-yr supply deal

Corning to buy out Samsung’s stake in LCD JV, signs 10-yr supply deal

Corning Inc stated it would buy out Samsung Electronics stake in their liquid crystal display panel joint venture in a deal that could result in the South Korean company taking a 7.4 % share in the Gorilla Glass maker.

The deal features a new led display glass provide settlement between Corning and Samsung operating thru 2023 so as to add about $2 billion to Corning’s annual sales. Corning shares jumped about 26 percent to $19.30 in prolonged buying and selling on Tuesday. Samsung will receive convertible most popular shares with a face worth of $1.9 billion and can make an extra $four hundred million investment in Corning through subscribing to new convertible preferred shares.

Samsung accused of criticising HTC products

Samsung accused of criticizing HTC merchandise

If the preferred shares are transformed, Samsung would get a 7.four p.c stake in Corning. The shares are convertible at $20 per share after seven years, with Corning having the way to force conversion if its stock goes above $35. Samsung owns forty three % of the Korea-primarily based joint venture; Samsung Corning Precision supplies Co Ltd (SCP), which was once set up in 1995.

Corning will also pay about $300 million to purchase out minority shareholders in the joint venture, which makes active matrix led glass utilized in television units, computer computers, personal computer monitors, digital cameras and cell phones. The U.S. firm stated the transaction, expected to close in the first quarter of 2014, would add about $350 million in annual profit before unique items.

Corning’s chief monetary officer, James Flaws, mentioned SCP was arranging at a time when the sector used to be more regional. “What we’re in a position to do here is take a land-locked asset which might handiest serve Korea, and in addition an asset which might handiest serve liquid crystal show technology, and as an alternative grow to be it to be able to serve any market with any particular glass merchandise,” he mentioned on a convention call with analysts.

Corning additionally stated preliminary results that were in line with market estimates. The company said it earned about 33 cents per share, up from 28 cents in the same quarter final 12 months. Internet gross sales had been estimated at $2.1 billion, up from $2 billion. Full results will be announced on October 30.

Samsung’s Galaxy word products, Nokia’s Lamia telephones and Droid Razor smartphones made by way of Google Inc’s Motorola industry use Corning’s scratch-resistant Gorilla Glass. Corning’s shares hit a yr-high of $sixteen. Forty three in May after buying and selling as little as $10.71 in November.