Sum of the parts

23 October 2013 By Robert Cyran Follow @rob_cyran

Corning’s taking full control of its Korean LCD display unit from Samsung and other minorities. Samsung gets a chunk of the Gorilla Glass maker and a long-term partner to produce needed high-tech materials. And Corning strengthens its position against its rivals on the cheap.

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On Oct. 22 Corning announced it would buy out Samsung’s 43 percent stake of their joint venture that produces glass for LCD screens. Samsung will receive $1.9 billion of convertible preferred shares in Corning and will invest an additional $400 million in the convertibles. Samsung would have a 7.4 percent stake in the American glass maker if converted, based on the current share count.
The convertible shares will have a 4.25 percent coupon and are convertible at a price of $20. They are not convertible for seven years and have limited voting rights.
The two companies also signed a 10-year agreement for LCD display glass.
Separately, Corning will pay about $300 million to buy out minority shareholders who own 7 percent of the joint-venture and announced an additional $2 billion share repurchase program.

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