Sony announced Monday that it will be selling its entire stake in an LCD manufacturing joint venture with Samsung. Their entire stake will be bought by Samsung Electronics for 1.08 trillion Won or US$934 million.
The LCD joint venture based in Korea was started in April of 2004 with Sony holding a little less than 50% of the stake. As per the understanding of the agreement reached now, Samsung will take over 100% ownership of the entire plant but would still provide Sony LCD’s at the prevailing market rates in the country.
Sony was forced to make this move as its losses in the television manufacturing segment kept mounting. Once Sony’s key profit business is now slated to give them a loss of at least a billion by the end of the fiscal year through April.
In fact Sony has struggled in the business due to fierce competition from foreign players like Samsung. And as per the new deal inked with Samsung for the supply and purchase of LCD’s would give both the players a competitive advantage in the market.
There is a considerable shift happening in the strategy at Sony which is concentrating on the four screen strategy which is to offer content on the all the four different screens i.e. smartphones, tablets, laptops and televisions. The acquisition of Ericsson’s 50% stake in the Sony Ericsson partnership was another step in the direction of the “four screen strategy”.
