Business News
Sony getting out of the flat panel business, selling to Samsung
Dec 26, 2011, 11:17 GMT
Seoul - Samsung Electronics Co said Monday that it would buy out its partner Sony Corp from their joint venture making liquid crystal displays (LCDs) as the Japanese company gets out of the flat-screen business amid soft demand for televisions and losses in the sector.
The South Korean company agreed to pay Sony 1.08 trillion won (935 million dollars) for its nearly 50-per-cent stake of S-LCD Corp, Samsung said.
The two companies at the same time agreed to a new partnership in which Samsung would supply Sony with LCD panels and they said they would work together on the development of LCD technology.
The transaction is to be completed in January.
Sony said in November that it expected to incur losses of 90 billion yen (1.15 billion dollars) in the current fiscal year, which ends March 31, because of low demand for televisions in the United States and Western Europe, the strong yen and flooding in Thailand that swamped Japanese factories and suppliers.
A loss this year would be the fourth-consecutive one for Sony.
To turn its fortunes around, the consumer electronics maker is seeking to concentrate on more profitable sectors, such as mobile phones and tablet computers.
The sale would see Sony still able to acquire LCDs without taking on the costs of production facilities, it said.
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