Corning signs strategic agreement with Samsung

Corning has entered into a series of strategic and financial agreements with Samsung Display intended to strengthen product and technology collaborations between the two companies.

Corning to acquire full ownership of Samsung Corning Precision Materials (SCP), enabling significant synergies. The Corning’s board authorizes additional $2 billion share repurchase program and expects the transactions to close in the first quarter of 2014. These agreements will allow Corning to extend its leadership in specialty glass and drive earnings growth.

After the transaction, Corning will obtain full ownership of SCP, an unconsolidated equity venture with Samsung Display that manufactures LCD glass in Korea. Samsung Display currently owns 43% of SCP. After redemption of their interest in SCP, Samsung Display’s investment in new convertible preferred shares of Corning with an aggregate face amount of $1.9 billion.

In addition, Corning’s board of directors has authorized an additional $2 billion of share repurchases through Dec. 31, 2015, dependent upon the transaction closing.

“We are excited to enter this new era of collaboration in our 40-year equity relationship with Samsung, one of the world leaders in consumer electronics,” said Wendell P Weeks, chairman, chief executive officer and president.

“The agreements provide important financial and strategic benefits to both Corning and Samsung,” added Weeks.

Kinam Kim, president and chief executive officer of Samsung Display said, “We look forward to concentrating our efforts and combining our expertise in product development with Corning’s renowned leadership in glass technologies to develop new market opportunities in consumer products and other industries.”

Corning also expects to realize increased flexibility in glass-melting capabilities, which should bring added capital savings. Furthermore, the company will re-evaluate the need for major capital expenditures for additional fusion glass manufacturing assets.

Effective today, Corning and Samsung have entered into a standstill agreement that limits Samsung’s activities with respect to Corning’s shares and governance. Effective upon closing, a shareholder agreement between Corning and Samsung will limit Samsung’s ownership to no more than 9 percent of Corning’s common shares on an as-converted basis.

Corning has LCD glass manufacturing operations in the United States, Japan, Taiwan and China. Samsung Corning Precision Materials has LCD glass manufacturing facilities in Korea. Following completion of the transaction, the SCP organization will be integrated into Corning’s Display Technologies segment.

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