Japanese electronics giant Sony Corp. has sold its stake in its venture with its counterpart, Samsung Electronics Co., to make LCD displays to the South Korean tech company, as it tries to reduce losses from its TV business.
Sony sold almost 50 percent of its stake to Samsung for £602 million ($940 million), subject to a final agreement, the company said Monday. The joint venture, which is called S-LCD, was set up in April 2004 in Tanjeong, South Korea.
The sale of the stake allows Sony CEO Howard Stringer to let go of the responsibility of manufacturing LCD panels amid losses in the TV market, where Samsung is the world’s leader.
“In terms of direction it is a positive for Sony. But if they are making a loss on the sale, one could ask why they didn’t make this decision sooner,” said Mito Securities analyst Keita Wakabayashi. “Their biggest problem is that they are not making a profit even though they don’t have many plants.”
Sony is aiming to secure a steady and flexible supply of display panels from Samsung without being responsible for the costs of manufacturing. This would give Samsung the ability to take control of S-LCD.
The deal means that the South Korean company has taken over Sony as the top company in consumer electronics. Samsung earned $14 billion in its latest full financial year, on sales of Over $134 billion, while Sony has lost $3 billion.
Does this mean that Sony will focus more on its other products like the PlayStation?
via: The Guardian