Sony said Monday it will sell off its entire stake in an LCD (liquid crystal display) manufacturing joint venture with Samsung Electronics for 1.08 trillion won (US$934 million).
The two companies signed a contract under which Samsung will turn the
company, S-LCD, into a fully-owned subsidiary that will still provide
panels for Sony televisions. The Korean-based LCD manufacturer was
established in April of 2004, with Sony holding just below a 50 percent
share.
The
move comes as Sony faces deep losses in televisions and faces questions
as to whether it can revive the once-core business. The Tokyo-based
company said in November it expected to lose over a billion dollars in
the current fiscal year through April, though it is currently
recalculating its forecast in light of the sale.
"This deal will allow Sony to acquire LCD panels from Samsung
Electronics in a stable way based on market prices, without the
responsibility or costs that come with operating a factory," Sony said
in a press release.
Like
domestic peers, Sony has long struggled to make its TV business
profitable against foreign rivals like Samsung and Vizio in the U.S.,
but executives have repeatedly said they won't abandon the product. The
firm's latest plan calls for a focus on profitability over the number of
units sold, and shifting to acquiring panels from outside
manufacturers.
The iconic Japanese company has said it is focused on a "four-screen
strategy," which aims to offer content and interconnect smartphones,
laptops, tablets, and televisions. It announced in October it would
acquire Ericsson's 50 percent stake in their Sony Ericsson mobile phone
joint venture, allowing it to better integrate smartphones into its
overall product lineup.
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