Samsung Acquires Over 7% of CorningBy: Sean Patterson - October 24, 2013
Of all the component manufacturers supplying the many pieces that make up modern smartphones, Corning has perhaps been the most important. Though early iPhones were prone to broken displays, Corning’s Gorilla Glass has consistently improved to the point where a small drop is now no worry for smartphone or tablet owners. Samsung, which has been making strides in recent years to become Apple’s biggest competitor, has now assured that it will have a piece of Corning’s lucrative display glass.
Corning today announced that Samsung’s display division will acquire a estimated 7.4% stake in Corning. The transaction will cost Samsung nearly $2 billion and is expected to be completed sometime during the first quarter of 2014.
“We are excited to enter this new era of collaboration in our 40-year equity relationship with Samsung, one of the world leaders in consumer electronics,” said Wendell Weeks, chairman and CEO of Corning. “The agreements provide important financial and strategic benefits to both Corning and Samsung.”
As part of the agreement, Corning will obtain ownership of an equity partnership between the companies named Samsung Corning Precision Materials, a Korean company manufactures LCD glass panels. Samsung will transfer its 43% stake in the company to Corning, and Corning will pay for the rest of the minority shareholder stock.
In addition to paying $1.9 billion for its Corning shares, Samsung will also pay $400 million for special convertible preferred shares of Corning. The companies have also, of course, formed a long-term supply deal for LCD displays that lasts through 2023. The companies will also partner on product development and “commercialization initiatives.”