Samsung spends big
Samsung and Sony have been operating an LCD making joint venture called S-LCD for a while now. Samsung has now announced that it is buying Sony out of its portion of the venture in a deal that is costing Samsung $934 million. That payout almost covers what it is costing Sony to get the Ericson name off its smartphones.
The purchase will turn S-LCD into a fully owned subsidiary of Samsung and the company will still provide panels for Sony HDTVs. The joint venture started in 2004 and Sony held 50% ownership. The deal makes sense for Sony with big losses accumulating in the HDTV market. Sony had expected to lose about a billion in the current fiscal year.
The sale will certainly help chop that loss down, assuming it closes in time to count for 2011. Sony said, "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."