Sony Sells LCD Venture Stake to Samsung After Losses
Dec. 26 (Bloomberg) -- Sony Corp. sold its stake in the venture with Samsung Electronics Co. to make liquid-crystal displays to the South Korean company after predicting an eighth consecutive year of losses from TVs amid sluggish demand.
Samsung will pay 1.08 trillion won ($935 million) in cash for Sony’s stake in S-LCD Corp., a venture formed in 2004, the Suwon, South Korea-based company said in a statement today. Sony, which invested 1.65 trillion won in the venture, will take a charge of about 66 billion yen ($846 million) in the quarter ending Dec. 31 after the deal, Japan’s biggest consumer- electronics exporter said in its statement.
The stake sale enables Sony Chief Executive Officer Howard Stringer, 69, to shed the responsibility of panel manufacturing amid losses in the TV business, where Samsung is the world’s biggest. To turn around Sony, which has forecast a fourth consecutive annual loss this year, Stringer has teamed up with partners to announce acquisitions worth a combined $8.4 billion in 2011. The purchases are designed to bolster the profitable phones and music divisions and introduced tablet computers to challenge Apple Inc.’s iPad.
“It’s a step forward for Sony,” said Shiro Mikoshiba, an analyst at Nomura Holdings Inc. in Tokyo. “Canceling out the venture enables Sony to become more flexible in procuring panels. Still, Sony continues to face falling prices and heavy fixed costs.”
Sony shares gained 1.6 percent to 1,394 yen at the close of trading in Tokyo today, while Samsung fell 0.2 percent to 1.07 million won. The deal was announced after the stock market closed for trading. The Nikkei reported the news earlier today.