Samsung Display has been an investor in Corning since 2014, when it received preferred shares – convertible after seven years and equivalent to an approximately 7.5% ownership stake – as part of a series of strategic and financial agreements that resulted in Corning acquiring full ownership of Samsung Corning Precision Materials, Co., Ltd. The agreements benefitted both companies’ shareholders. Financial and strategic benefits to Corning included full control of its global fusion-glass manufacturing platform, greater flexibility in asset use, greater operational efficiencies, and increased options to pursue precision-glass opportunities.
Following the seven-year anniversary of the agreements, and with the Corning common dividend exceeding the preferred dividend, Samsung Display will convert all of its preferred shares to common, which represents approximately 13% of Corning’s common shares on an as-converted basis.
“Corning is a great partner and we are pleased to have an opportunity to strengthen and extend our nearly 50-year relationship,” Joo-Sun Choi, president and chief executive officer of Samsung Display, said. “Our latest seven-year commitment reaffirms Samsung’s confidence in the value of Corning’s capabilities, our ongoing technology collaborations, and our combined innovation leadership.”
Based on Samsung Display’s continued confidence in Corning, and the strong performance of its original investment, the two companies will enter into a new agreement for another seven years.
- Samsung Display will convert all of its preferred shares to 115 million common shares.
- Corning will repurchase 35 million of those common shares, resulting in Samsung Display having an ownership stake of approximately 9%.
- The initial repurchase of common shares is expected to close in April 2021 and will immediately reduce Corning’s fully diluted share count by 35 million shares, or about 4%.
- Samsung Display will maintain its ownership stake in Corning until at least 2028.
“From the early days of CRT, to LCD, to more recent collaborations on OLED, QD Display, and flexible displays, we’re proud to be the key material innovation partner to Samsung,” said Wendell P. Weeks, Corning’s chairman and CEO. “We are honored by Samsung Display’s vote of confidence to remain a significant shareholder for another seven years.”