Sony and Samsung have ended their LCD joint venture established in 2004. The split comes after rumors of the dissolution were first reported in October and follows Sony's November announcement of a $1.2 billion annual loss due to weak demand from its loss-leading television division coupled with a strong yen. Samsung will acquire all of Sony's 50 percent share for 1.08 trillion won (about $938.97 million) and convert the joint venture into a wholly-owned subsidiary. In addition to monetizing its share in S-LCD, Sony enters into a strategic relationship with Samsung that secures a steady supply of LCD panels based on market prices and without the burden of operating a manufacturing facility. The deal is expected to close by January of 2012 subject to regulatory approvals.
The move comes as Sony struggles to compete in the global television business. The Japanese company has already reshuffled its TV division this year and is rumored to be considering alternative approaches to the market including launching its own streaming internet TV service to compete with cable.
In separate news, Samsung also announced that it would be absorbing the remaining 50 percent stake of Samsung LED from Samsung Electro-Mechanics in an effort to further streamline its business.