Corning and Samsung announced a complicated deal today - Corning will buy out Samsung Display's stake in their LCD glass joint venture (Samsung Corning Precision Materials, or SCP). In exchange, Samsung will receive convertible preferred shares in Corning that are valued at $1.9 billion and will acquire more shares for $400 million. If Samsung converts all these shares, they will own 7.4% of Corning.
Corning estimates that this move will add about $2 billion in annual sales and about $350 million in profit. As part of the deal, the two companies signed a new 10-year LCD display glass supply agreement. Corning will also buy other minority shareholders in SCP for about $300 million, and will also pay a special $1.4 billion dividend payment to SDC.
Corning explains this deal saying that they want to turn SCP from a company that only supplies LCD glass (Gorilla glass) to Korean companies to a company that services any market with any specific glass products.
Corning and Samsung also have an OLED glass joint venture in Korea. This one makes Lotus Glass which is used for OLED (and LTPS) backplanes. This is a complicated deal which may sign the fact that Samsung sees itself shifting away from LCD to OLED in the future. The will still need glass products and will still need a supply of LCD glass for years (hence the 10-year supply deal and the stake in Corning) but perhaps they want more control on OLED glass and less on LCD glass.
A few weeks ago we interviewed a couple of Corning executives regarding the OLED market and Corning glass products for OLED panels.