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With Corning deal, Samsung eyes tighter grip on supply chain

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Samsung Display buys $2.3 bln stake in Corning.

* Corning to own all of LCD glass joint venture with Samsung

* Deal is Samsung's latest push into advanced components

* Corning shares jump 28 pct on the deal and $2 bln share buyback

* Samsung SDI shares drop 8 pct

Samsung Electronics Co Ltd moved to tighten its grip on vital electronics parts supplies as it looks to stay ahead of rival Apple Inc with new products in a fast changing technology industry. The South Korean group's unlisted Samsung Display unit could become the biggest shareholder of Corning Inc, the maker of scratch-resistant Gorilla Glass used in many mobile gadgets, as part of a deal in which Corning buys Samsung Display out of a 1995 joint venture making glass for liquid crystal displays. That deal includes a new 10-year LCD glass supply agreement between New York-based Corning and Samsung Display, which makes LCD panels for tablets and TVs for Apple, Sony Corp and Lenovo Group. Corning said the deal would add about $2 billion to its annual sales. As part of the agreement, Samsung Display will receive new convertible preferred shares in Corning worth $1.9 billion, and will invest another $400 million by subscribing to new convertible preferred shares. If the preferred shares are converted, Samsung Display would become the U.S. firm's biggest shareholder, with a 7.4 percent stake. The deal follows a series of bolt-on acquisitions by Samsung Group firms in recent months as the group muscles deeper into key supply chains and positions itself for technology shifts.

Corning, whose Gorilla Glass is widely used in Samsung's Galaxy devices, Nokia's Lumia and Google unit Motorola's Droid Razr, also produces ceramic substrates, optical fibers and specialty glass solutions...Read more on reuters

Last modified on Wednesday, 23 October 2013 15:44

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