Sony Sells LCD Panel Joint Venture Shares to Samsung
December 26, 2011 11:31 AM
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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
earlier this year, which made consumers question Sony's competence; disappointing
sales, and a failed attempt at a joint venture with Google for
, which has not seen impressive sales.
This article is over a month old, voting and posting comments is disabled
12/27/2011 4:21:08 PM
The primary reason I have never entertained the idea of buying a Sony television has been the fact that there are always many other TVs that appear to be the same visual quality sitting right next to Sony's for several hundred dollars less.
12/27/2011 8:54:54 PM
Amen to that.
12/28/2011 6:28:00 AM
I'm sure this will get marked down for trolling, but let's be honest: ALL entry-level Sony products are garbage. The only way to get a decent product from Sony these days is to purchase one of their top-of-the-line series; whether its TVs, receivers, etc. And usually at that price point you have companies like Samsung, Pioneer, Harmon Kardon, etc. that are just as good if not better. Don't get me wrong, the Sony research labs are typically ahead of their time. But overall as a company they have been going downhill since the 80s!
"You can bet that Sony built a long-term business plan about being successful in Japan and that business plan is crumbling." -- Peter Moore, 24 hours before his Microsoft resignation
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