Sony, Toshiba and Hitachi confirm LCD tie-up

Sony, Toshiba and Hitachi confirmed on Wednesday that they would integrate their small and medium-sized display businesses to create the world’s largest producer of touchscreen liquid crystal displays, which will be controlled by the Innovation Network Corporation of Japan, a public-private partnership.

The new company, to be called Japan Display, will be 70 per cent owned by INCJ while Sony, Toshiba and Hitachi will each take a 10 per cent stake.

The merger of their small LCD businesses would give the new company economies of scale that none of the current businesses enjoys on its own. Sony has a market share of just over 6 per cent and analysts believe it is struggling, although the company does not provide a profit breakdown for that business.

“By integrating each partner company’s wealth of display expertise and knowhow, I am confident the new company will become a driving force for technological innovation and new growth in the rapidly expanding small-and-medium-sized display market,” said Howard Stringer, Sony chief executive.

The market for small and medium-sized displays is forecast to grow 21 per cent annually and sales of the new company are expected to reach Y4,200bn ($54.8bn) in 2015.

INCJ, which will invest a total of Y200bn in exchange for new shares to be issued by the company, plans to take Japan Display public by March, 2016.

The deal is the largest investment for INCJ, which was set up in 2009 with the ability to invest up to Y900bn of mostly government funds.

It is also the first deal by INCJ that is aimed at industry consolidation, a key objective of the group’s investments.

Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't cut articles from and redistribute by email or post to the web.