Sony to sell LCD venture stake to Samsung for $940 million

According to reports, Sony Corp has finally agreed to sell 50 percent of its stake in a joint venture of LCD TV with Samsung Electronics, to the company for a huge amount of $940 million. Sony’s move comes in a move to drop the heavy losses it has gained in its television business. In July, the venture which had been intact since 7 years dropped its capital by fifteen percent and according to sources in the industry, Sony was also entering negotiations to exit, looking for cheap outsources for its flat screen televisions. At the same time Samsung, the South Korean company, moved ahead with the next gen display screens.

An analysts working with Mito Securities which is Tokyo based, Keita Wakabayashi, while commenting on the deal said that in regards to direction, the move is a positive one for Sony Corp. However, Keita said that if the company was generating a loss on every sale, one thinks about why they didn’t facilitate the decision earlier. Keita also said that their biggest issue is that they are not generating profits even when they are not operating many plants. Sony Corp is the 3rd biggest flat panel television manufacturer in the world. In November, the company cautioned about the fourth successive year of net losses for the financial year that will follow through till next March. Sony’s TV division separately was prepared to lose $2.2 billion on dropping demand and an increasing yen. On Monday, the company said that it will analyze its earnings expectations to show 66 billion yen in damage losses generated from the transactions, along with forecasted future cost savings.

The sale of its LCD division stake however is being seen as a right direction and positive move for the loss generating company. However, it will not be as good a move as it is for Sony, for Samsung, according to analysts.

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