LG Chem announced on June 10 that it has recently signed a conditional contract with China’s chemical materials company Shanshan to transfer its LCD polarizer business for US$1.1 billion.
LG Chem said that some product groups such as LCD polarizers for automobiles will be excluded from this sale as they are still lucrative.
“We are going to focus on strengthening our competitiveness in tech materials, especially organic light-emitting diode (OLED) and nurture our OLED polarizer business,” LG Chem said in a statement.
The company said the deal is pending approval from its board of directors, and the terms are subject to change. It said it plans to make another announcement once the deal is finalized.
A polarizer is a film that is attached to the front and back of an LCD panel to pass or block light. At its peak, LG Chem’s polarizer business posted 2 trillion won ($1.7 billion) in annual sales and had a 27% market share globally. However, the company has decided to withdraw from the business as its profitability deteriorated due to a price war started by Chinese companies.
In February, LG Chem sold its LCD color photoresist materials business to Siyang International, a subsidiary of China’s Yoke Technology, for 58 billion won ($48.2 million). It also withdrew from its LCD glass substrate business, for which no potential buyer showed up.
Ningbo Shanshan said on Tuesday it plans to raise 3.1 billion yuan ($438 million) in a share placement to fund acquisition of a majority interest in LG Chem’s LCD polarizer business in China, Taiwan and South Korea.