Toshiba buys out Panasonic in LCD JV for $20.2 million
01 Apr 2009
Toshiba Corp. has agreed to buy out Panasonic Corp.'s 40-per cent stake in an unprofitable LCD joint venture for around ¥2 billion ($20.2 million), the latest shuffle within the market for small LCD screens used in mobile phones, small computers and car navigation displays.
The two companies said Toshiba would acquire Panasonic's shares on 28 April and then change the business' name to Toshiba Mobile Display Co. By making the company a wholly owned subsidiary of Toshiba, the business can implement restructuring measures more quickly, Toshiba said.
The venture, currently known as Toshiba Matsushita Display Technology Co., is the second-largest manufacturer of small- and medium-size LCD screens with a 10 per cent market share, according to research firm DisplaySearch. Sharp Corp. is the market leader with a 20 per cent share.
Toshiba, which expects to have fallen into its worst-ever annual loss in the year ended last month, said the move is part of its restructuring measures to cut ¥300 billion in costs in the current business year. Hit by falling prices and sluggish demand, Toshiba Matsushita Display is expected to post an operating loss of ¥30 billion on sales of ¥270 billion last business year.
For Panasonic, the deal should allow the world's top maker of plasma TVs to focus more resources on large displays, though it will still hold 25 per cent in another small and midsized LCD venture majority-owned by Hitachi Ltd.
The venture was established in 2002 with 2,700 workers and capitalisation of ¥10 billion by combining the LCD businesses of Toshiba and Panasonic, which was then called Matsushita Electric Industrial Co. After the completion of the transaction, Toshiba plans to focus on displays using organic light-emitting diode (OLED) technology
The deal is the latest realignment in the small-screen LCD market. Last month, Sony Corp. and Seiko Epson Corp. said they were in talks for a possible alliance in the LCD business and NEC Corp. said it was closing a LCD plant in Japan.