Sony Corp (NYSE:SNE) will sell its LCD venture stake with Samsung Electronics to the company for $940 million as it tries to shore up losses in its TV business.
The venture cut its capital by 15% earlier this summer an industry sources had said Sony was negotiating an exit with the intent to switch to cheaper outsourcing for flat screens for their TVs. Meanwhile, Samsung will push ahead with next-generation displays.
“In terms of direction it is a positive (for Sony),” said Keita Wakabayashi, an analyst at Mito Securities in Tokyo, about the deal. “But if they are making a loss on the sale, one could ask why they didn’t make this decision sooner.”
“Their biggest problem is that they are not making a profit even though they don’t have many plants,” he said.
Sony warned last month of a fourth straight year of net losses with its TV unit losing $2.2 billion on falling demand and a surging yen.
Sony has been trying to strengthen their position in other markets as well including the smartphone market. Back in October, Sony took control of its mobile phone joint venture with Ericcson for $1.5 billion.
The company is hoping to take advantage of its music and video content and compatibility with TVs and tablet computers as it tries to catch up with market leaders such as Apple Inc. (NASDAQ:AAPL) and Google Inc. (NASDAQ:GOOG).