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  (Source: comtechome.com)
Samsung will acquire all of Sony's S-LCD shares, which will make S-LCD Corporation a complete subsidiary of Samsung

After some talk early last month about shaking up its LCD business unit, Sony has finally reached and signed agreements with Samsung in an effort to save its failing LCD TV branch.

Sony has been in the LCD TV business for eight years, and has had eight years of losses in a row. After realizing that this sinking ship was not producing (and likely will not produce) any annual profits, Sony began negotiating with Samsung on a buyout of its 50 percent manufacturing stake in their LCD joint venture, S-LCD Corporation, which was established in April 2004.

Now, Sony and Samsung have announced that they've signed agreements to change up their current S-LCD business relationship.

According to the agreements, Samsung will acquire all of Sony's S-LCD shares, which will make S-LCD a complete subsidiary of Samsung. Samsung will pay Sony approximately KRW 1.08 trillion ($939 million USD) for these shares.

In addition, both Sony and Samsung have reached a strategic agreement that allows for the purchase and supply of LCD panel efforts both competitively and cooperatively.

These new agreements and S-LCD exit will allow Sony to switch to less costly outsourcing options that could potentially help strengthen its failing TV business. The exit would lead to a loss of 66 billion yen ($856 million USD) for the last three months of 2011, but would result in decreased LCD costs by 50 billion yen ($640 million USD) per year.

"For Sony, this transaction will enable it to monetize its shares in S-LCD and aims to secure a flexible and steady supply of LCD panels from Samsung, based on market prices and without the responsibility and costs of operating a manufacturing facility," said Sony in its statement. "With whole ownership of S-LCD, Samsung anticipates heightened flexibility, speed and efficiency in both panel production and business operations."

Assuming all goes well in regards to approvals from regulatory authorities, the payment and share transfer are expected to close by the end of January 2012.

There's quite a list of reasons for Sony's TV-related failure, such as strong yen, which cuts into profits; several security breaches earlier this year, which made consumers question Sony's competence; disappointing OLED design sales, and a failed attempt at a joint venture with Google for Google TV, which has not seen impressive sales.

Source: Sony



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RE: Cost
By Uncle on 12/27/2011 8:54:54 PM , Rating: 2
Amen to that.


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