LCD Manufacturers Combine; Serious Threat to Competitors

Taiwan and South Korea are in a race – the race for LCD supremacy. So far, South Korea is winning with Samsung Electronics and LG Display leading the way. To combat this, Taiwan’s Innolux Display will buy Chi Mei Optoelectronics in order to compete globally. This deal will automatically make the combined company, Innolux-Chi Mei, the world’s fourth largest LCD screen maker and the biggest LCD monitor maker.

Specific details of the deal were not released to the public. But, reports say that Innolux Display will pay an 18 percent premium per share for Chi Mei Optoelectronics based on Friday’s closing stock price. He said the deal values Chi Mei at around US$5 billion based on the number of shares Chi Mei reported at the end of the third quarter.

For now, Samsung Electronics will remain the world’s biggest and LG Display, the world’s second biggest, LCD makers. AU Optronics, the third-largest LCD screen maker in the world, will be the new company’s biggest competitor in Taiwan.

The deal is expected to close May 1, 2010, Innolux said in a statement. Innolux will be renamed Chimei Innolux Corporation. The boards of both companies approved the deal on Saturday, but the transaction still needs shareholder and regulatory approval.