Early last year display maker Samsung and rugged glass maker Corning announced a joint venture called Samsung Corning Precision Materials (SCP). Now, less than two years later, the two companies are growing even closer.
The end result of a somewhat complicated transaction is that Samsung will own a 7.4% stake in Corning. Here are the details on the deal: Samsung currently owns 43% of SCP and Corning will acquire that stake for $1.9 billion, then Samsung will throw another $400 million on top of that and the sum translates to 7.4% of Corning. SCP also has some minority investors, which Corning will buy to own the venture completely.
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, Wendell P. Weeks, chairman, chief executive officer and president, said. The agreements provide important financial and strategic benefits to both Corning and Samsung.
The relationship between Corning and Samsung will strengthen further with a deal to supply Corning glass for Samsung LCD displays throughout 2023. Samsung Display provides LCDs for many manufacturer's, not just Samsung Mobile, so you can expect to see Gorilla Glass on phones for years to come.
According to Corning, its investors will see an almost immediate benefit with diluted earnings per share going up 20% in 2014 and 2015. The company will also come into some cash (its share of the SCP money is $1.2 billion) and will start a $2 billion share repurchase program.
You can read the technical details on the detail in Corning's press release.
so corning is owned by Samsung now or what
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