Corning Inc said it would buy out Samsung Display's stake in their LCD glass joint venture in a deal that could see the Samsung Electronics Co Ltd subsidiary take a 7.4 percent share in the Gorilla Glass maker.
The deal includes a new 10-year LCD display glass supply agreement between Corning and Samsung Display -- which makes LCD panels for tablets and televisions -- that will add about $2 billion to Corning's annual sales.
Corning shares jumped about 26 percent to $19.30 in extended trading on Tuesday.
Samsung will receive convertible preferred shares with a face value of $1.9 billion and will make an additional $400 million investment in Corning by subscribing to new convertible preferred shares.
If the preferred shares are converted, Samsung would get a 7.4 percent stake in Corning. The shares are convertible at $20 per share after seven years, with Corning having the option to force conversion if its stock goes above $35.
Samsung owns 43 percent of the Korea-based joint venture, Samsung Corning Precision Materials Co Ltd (SCP), which was set up in 1995.
Source: Reuters
